Weighing the Options of Refinancing

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Ever heard the pearl of wisdom that states you should only refinance if the new interest rate will be at least 2 points below your existing one? That could have been sound advice a while back, but with refinancing dropping in cost over the last few years, it is never the wrong time to think about a new loan! Refinancing has a number of advantages that often make it worth the up-front expenditure several times over.

Benefits

You may be able to lower your interest rate (sometimes significantly) and reduce your mortgage payment amount with your refinanced loan. Additionally, you might have the option of tapping into your home equity by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. You may be able to refinance to a shorter-term mortgage, enabling you to build your home equity quicker.

Expenses and Fees

Of course, you will have some fees and expenses during the the refinance process. You'll have to pay the same sort of expenses and fees as you did with your current mortgage loan. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Doing the Math

You might investigate paying points to reduce your interest rate. The money you will save on the life of the mortgage might be substantial if you've paid up front about 3% of the new loan balance. You might be told that these points can be deducted on your income taxes, but as tax regulations are ever-changing, we urge you to consult with your tax professional before depending on this.

Speaking of taxes, if you bring down your interest rate, of course you will also be lowering the interest amount that you'll be able to deduct on your taxes. This is another cost that some borrowers take into account. Call us at 7186399500 to help you do the math.

Most people find that the savings each month outweigh the initial expenses of refinancing. We'll work with you to find out what mortgage program is right for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and what effect refinancing may have on your taxes. Call us at 7186399500 to get you started.

Want to know more about refinancing? Call us at 7186399500.

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Channel Mortgage LLC

Connecting the Dots to Home Ownership

55-25 69th Street 1st Floor
Maspeth, NY 11378-1806