When is Refinancing Worth it?
 |
 |
 |
Shopping for a mortgage? We'd be thrilled to answer your questions about our mortgage offerings! Give us a call at 972-447-5778. Ready to get started? Apply Online Now.
|
|
|
|
|
Some have said that only if your new interest is at least 2 points lower, should you refinance your mortgage. Maybe several years ago that was wise advice, but since refinance costs have been getting lower, it could be time to look into it. A refinance is often worth its cost several times over, factoring in the advantages that can come, along with a reduced interest rate.
Advantages of Refinancing
You could be able to bring down your interest rate (sometimes by a lot) and make smaller monthly payments with your refinanced mortgage loan. You may also have the option to "cash out" some of the built-up equity in your residence, that you may use to take care of higher interest debts, add on to your home, or finance a vacation. With reduced rates, you might also be able to build up home equity more quickly by moving to a shorter-term loan.
Fees and Expenses
All of these advantages do come with some expense, though. You'll pay the same kinds of fees as with your existing mortgage loan. These might include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Do the Math
You could need to pay points (prepaid interest) to gain a more favorable rate of interest. When you pay (on average) three percent of the loan amount at the start, the savings for the term of the refinanced mortgage loan can be substantial. You may have heard that the points may be tax deductible, but since tax regulations are difficult to keep up with, we urge you to speak with your tax professional before depending on this.
Another cost that a borrower might consider is that a reduced interest rate will reduce the interest amount you'll deduct from your taxes. We can help you do the math! Call us at 972-447-5778.
Most people find that the monthly savings balance out the initial cost of refinancing. We will work with you to determine which mortgage program is perfect for you, looking at your cash on hand, how likely you are to sell your residence in the next few years, and how refinancing could effect your taxes. Call us at 972-447-5778 to get you started.
Want to know more about refinancing? Give us a call at 972-447-5778.
|
