Weighing the Options of Refinancing
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It has been said that only in the case your new interest will be at least 2 points lower, should you refinance your mortgage. Maybe several years ago that was wise advice, but since refinance costs have been falling recently, it could be a good time to take a serious look. Refinancing your mortgage loan has some advantages that often make it worth the initial cost several times over.
When you refinance, you may have the ability to reduce the interest rate and mortgage payment , perhaps significantly. Additionally, you might be given the option of pulling out some of the equity in your property by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. You might have the option to refinance to a shorter-term mortgage, giving you the ability to add to your equity quicker.
Fees and Expenses
Of course, you will have some fees and expenses during your process of refinancing. When you refinance, you're paying for basically the same things you were charged for during your current mortgage. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might investigate paying points to receive a lower interest rate. The money you'll save over the life of the mortgage loan could be significant if you've paid up front about 3% of the new loan balance. You might hear that the points can be deducted on your income taxes, but because tax regulations are difficult to keep up with, we urge you to speak with your tax professional before considering this in your calculations.
Speaking of taxes, once you reduce your interest rate, of course you'll also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is another cost that some borrowers consider. We can help you do the math! Call us at 5627733870.
All things considered, for most people the amount of initial costs to refinance are made up very quickly in monthly savings. We can help you explore what your options are, considering the effect a refinance may have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 5627733870 to get started.
Curious about refinancing? Give us a call at 5627733870.