Is Refinancing Worth the Cost?
Curious about refinancing your home? Call us at 1-844-MBROKER (1-844-627-6537).
It has been said that only if your new interest is at least two points under your current rate, should you refinance your loan. Perhaps several years ago that was sage advice, but as refinance costs have been falling recently, it may be time to take a serious look. Refinancing has a variety of benefits that often make it worth the up-front expenditure several times over.
Benefits from Refinancing
When you refinance, you could have the ability to lower the interest rate and mortgage payment , perhaps considerably. You could also have the option to "cash out" some of the built-up equity in your home, that you will be able use to take care of higher interest debts, make home improvements, or plan a vacation. With reduced interest rates, you might also be able to build up home equity more quickly by changing to a shorter term loan.
As you probably know, you'll have to pay for your the refinance process. You'll pay the same sort of fees as with your existing mortgage. Included in your costs will typically 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 to pay. This depends on the rules of your current loan. However, this sort of penalty might apply just to the first couple of years of the mortgage loan. We'll help you with the details: contact us at 1-844-MBROKER (1-844-627-6537).
Do the Math
Paying points can get you a lower interest rate. The money you'll save on the life of the mortgage might be significant if you've paid up front about 3% of the new loan total. We recommend that you consult with a tax professional before acting on rumors that these paid points can be deducted on your federal income taxes.
Another thing about taxes is that if your interest rate is reduced, of course you'll also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is one more cost that some borrowers consider. Call us at 1-844-MBROKER (1-844-627-6537) to help you do the math.
All things considered, for most borrowers the amount of up-front costs to refinance are paid back soon in monthly savings. We can help you find out what your options are, considering the effect a refinance might have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 1-844-MBROKER (1-844-627-6537) to get started.
Shopping for a mortgage loan? We'd be thrilled to talk about your mortgage needs! Call us at 1-844-MBROKER (1-844-627-6537). Ready to get started? Apply Online Now