When is Refinancing Worth it?
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Are you looking for a new mortgage loan? We can assist you! Call us at 1-800-606-2794. Want to get started? Apply Here.
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Have you ever heard the old rule of thumb that states you should only refinance if your new interest rate is at least 2 points below your existing rate? That could have been good advice years ago, but with the fact that refinancing has been costing less over the last few years, it is never the wrong time to explore the options of a new mortgage loan! A refinanced mortgage loan can be worth its cost many times over, considering the advantages that can come, along with a lower interest rate.
Benefits
You could be able to lower your interest rate (sometimes by a lot) and have smaller monthly payments with your refinanced mortgage loan. Additionally, you might be given the option of tapping into the equity in your property by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. You may have the option to refinance into a shorter-term mortgage loan, enabling you to build your home equity quicker.
Fees and Expenses
All these advantages do cost something, though. You will pay the same sort of fees as you did with your current mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
Paying discount points can result in a better interest rate. When you pay (on average) three percent of the mortgage loan amount up front, your savings for the term of the new mortgage loan can be significant. You might have heard that points can be tax deductible, but as tax regulations are difficult to keep up with, please speak with a tax professional before considering this in your calculations.
Speaking of taxes, if you lower your interest rate, naturally you will also be reducing the paid interest amount that you'll be able to deduct on your federal income taxes. This is one more cost that some borrowers take into account. Call us at 1-800-606-2794 to help you do the math.
Most people find that the monthly savings outweigh the up-front cost of refinancing. We will work with you to determine what loan program is the ideal fit for you, looking at your cash on hand, the likelihood of selling your home in the near future, and how refinancing may effect your taxes. Call us at 1-800-606-2794 to get you started.
Want to know more about refinancing? Give us a call: 1-800-606-2794.