When is Refinancing Worth it?

Curious about refinancing? Call us at 623-340-0934.

Some have said that only if your new interest will be at least 2 points lower, should you refinance your mortgage. Maybe several years ago that was good advice, but as refinance costs have been getting lower, it could be a good time to look into it. A refinance is often worth its cost many times over, considering the benefits that can come, along with a lower interest rate.

Benefits

You might be able to bring down your interest rate (sometimes significantly) and reduce your monthly mortgage payment amount with a refinanced loan. You also could have the option of tapping into the equity in your home by "cashing out" some money to remodel your home, consolidate debt, or plan a special vacation. With lower rates, you may also get the chance to build up home equity more quickly by switching to a shorter term loan.

Expenses and Fees

All of these advantages do come with some expense, though. You'll pay the same kinds of expenses and fees as you did with your present home loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

When you refinance your existing loan too quickly, there might be a penalty . It all depends on your present mortgage loan agreement. However, this sort of penalty might apply just to the first few years of the mortgage loan. We'll help you with the details: contact us at 623-340-0934.

Do the Math

You might look into paying points to reduce your interest rate. When you pay (on average) three percent of the loan amount at the start, your savings for the term of the refinanced mortgage loan can be substantial. Please talk to a tax professional before acting on hear-say that the paid points may be deducted on your taxes.

Speaking of taxes, once your interest rate is lowered, naturally you will also be lowering the interest amount that you'll be able to deduct from your federal income taxes. This is one more cost that borrowers take into account. We can help you do the math! Call us at 623-340-0934.

Most people find that the monthly savings outweigh the initial expenses of refinancing. We'll work with you to determine which loan program is best for you, taking into account your cash on hand, how likely you are to sell your home in the near future, and how refinancing could effect your taxes. Call us at 623-340-0934 to get you started.

Looking for mortgage advice? We'd be thrilled to talk about your mortgage needs! Give us a call at 623-340-0934. Ready to get started? Apply Now.

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