Weighing the Options of Refinancing
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Some have said that only in the case your new interest will be at least two points lower, should you refinance your mortgage. Perhaps several years ago that was good advice, but as refinance costs have been falling recently, it may be a good time to take a serious look. A refinance is often worth its cost several times over, because of the advantages that may come, along with a reduced interest rate.
Advantages
When you refinance, you may be able to lower the interest rate and monthly payment , sometimes significantly. You may also be able to "cash out" a portion of your equity, which you are able use to take care of higher interest debts, make home improvements, or plan a vacation. With reduced rates, you might also get the chance to build up home equity more quickly by switching to a shorter term mortgage loan.
Expenses and Fees
Of course, you will have to pay for your the refinance process. You will be charged the same sort of expenses and fees as with your current home loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Doing the Math
You might think about paying points to get a better interest rate. When you pay (on average) three percent of the mortgage loan amount initially, the savings for the life of the new mortgage can be great. You might be told that the points may be tax deductible, but as tax regulations can be difficult to keep up with, we urge you to speak with a tax professional before depending on this.
Another thing about taxes is that once your interest rate is reduced, naturally you'll also be lowering the paid interest amount that you'll be able to deduct from your taxes. This is one more cost that some borrowers consider. Call us at 6233400934 to help you do the math.
All things considered, for most people the total of up-front costs to refinance are made up very quickly in savings each month. We can help you figure out your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 6233400934 to get started.
Curious about refinancing your home? Call us: 6233400934.