Weighing the Options of Refinancing
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Ever hear the old rule of thumb that says you should only consider refinancing if the new interest rate is at least two points under your present rate? That may have been sound advice years ago, but with the fact that refinancing has been costing less recently, it's a good time to explore the options of a new mortgage loan! A refinance is often worth its cost many times over, because of the benefits that can come, as well as a reduced interest rate.
You may be able to lower your interest rate (sometimes substantially) and reduce your mortgage payment amount with your refinanced mortgage. You also could be given the option of pulling out some of your home equity by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. You could be able to refinance to a shorter-term mortgage, enabling you to build up your home equity quicker.
Expenses and Fees
Of course, you will have some fees and expenses during your the refinance process. When you refinance, you are paying for a lot of the same things you were charged for when you got your current mortgage loan. These may include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Do the Math
Paying points can help you get a lower interest rate. The money you will save on the life of the mortgage loan could be significant if you have paid up front about three percent of the new loan total. You might have heard that these points can be deducted on your income taxes, but as tax regulations are difficult to keep up with, please consult your tax professional before making any decisions based on this.
Another thing about taxes is that once you bring down your interest rate, naturally you will also be reducing the paid interest amount that you may deduct on your federal income taxes. This is one more cost that some borrowers take into account. Call us at 7186399500 to help you do the math.
All things considered, for most the amount of up-front costs to refinance will be paid back soon in monthly savings. We can help you figure out what your options are, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 7186399500 to get you started.
Curious about refinancing? Call us: 7186399500.