Is Refinancing Worth the Cost?
Curious about refinancing your home? Give us a call at 9724662551.
Some have said that only when your new interest is at least 2 points lower, should you refinance your loan. That could have been sound advice years ago, but since refinancing has been costing less recently, it is never the wrong time to explore the options of a new mortgage loan! A refinance is often worth its cost many times over, factoring in the advantages that it brings, in addition to a reduced interest rate.
Benefits from Refinancing
You might be able to lower your interest rate (sometimes significantly) and reduce your monthly mortgage payment amount with a refinanced loan. Additionally, you might be given the option of pulling out some of the equity in your property by "cashing out" some funds to remodel your home, consolidate debt, or plan a special vacation. With lower rates, you might also get the chance to build up home equity faster by changing to a shorter-term loan.
As you probably expect, you'll have some fees and expenses during the process of refinancing. You'll be charged the same types of fees as with your current home loan. These may include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
You might have to pay a penalty if you refinance your existing loan too quickly. It all depends on your present loan contract. However, some of these penalties apply only to the first few years of your mortgage loan. We will help you figure it out: contact us at 9724662551.
Doing the Math
Paying points can result in a lower interest rate. Your savings on the life of the mortgage loan may be significant if you have paid up front about 3% of the new loan balance. Please consult with a tax professional before acting on hear-say that the points paid can be deducted on your federal income taxes.
One more expense that borrowers might take into account is that a reduced rate of interest will lower the interest amount you'll deduct on your taxes. Call us at 9724662551 to help you do the math.
Most people find that the savings each month balance out the initial expenses of a refinance. We will work with you to determine what mortgage program is best for you, considering your cash on hand, the likelihood of selling your home in the next few years, and how refinancing can effect your taxes. Call us at 9724662551 to get you started.
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