Is Refinancing Worth the Cost?
Want to know more about refinancing your home? Give us a call: 863-286-4824.
Ever hear the old rule of thumb that states you should only consider refinancing if the new interest rate is at least 2 points lower than your existing one? That could have been accurate a while back, but with refinancing dropping in cost in recent years, it's a good time to think about a new mortgage! A refinance can be worth its cost many times over, factoring in the advantages that it brings, as well as a reduced interest rate.
You might be able to bring down your interest rate (sometimes by a lot) and reduce your monthly mortgage payment amount with your refinanced mortgage. You might also have the ability to "cash out" a portion of your equity, which you will be able use to consolidate debt, add on to your home, or take a vacation. With reduced interest rates, you might also get the chance to build your home equity faster by changing to a shorter term loan.
Expenses and Fees
As you probably know, you will have some fees and expenses during the process of refinancing. With your refinance, you're paying for many of the same things you paid for during your existing mortgage. Among these might be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
When you refinance your current mortgage loan too quickly, there might be a penalty to pay. It all depends on your current mortgage loan agreement. However, the penalties may apply just to the first few years of the loan. We will help you with the details: contact us at 863-286-4824.
Doing the Math
Paying points can result in a lower interest rate. If you pay (on average) three percent of the loan amount initially, your savings for the life of the refinanced loan can be substantial. Please talk to a tax professional before acting on hear-say that any points paid may be deducted on your federal income taxes.
Another cost that borrowers might take into account is that a lower rate of interest will lower the interest amount you'll be able to deduct from your federal income taxes. We can help you do the math! Call us at 863-286-4824.
All things considered, for most people the total of up-front costs to refinance will be paid back very quickly in savings each month. We can help you figure out what your options are, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at 863-286-4824 to get started.
Are you looking for a mortgage loan? We'll be glad to answer your questions about our many mortgage solutions! Call us at 863-286-4824. Ready to get started? Apply Online Now