Is Refinancing Worth the Cost?
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Shopping for a mortgage? We can assist you! Give us a call at 2039758552. Ready to get started? Apply Online Now.
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Have you ever heard the old rule of thumb that says you should only consider refinancing if your new interest rate will be at least 2 points below your existing rate? Perhaps several years ago that was good advice, but as refinance costs have been getting lower, it could be a good time to take a serious look. Refinancing has some benefits that will often make it worth the initial cost several times over.
Benefits from Refinancing
When you refinance, you may be able to lower the interest rate and monthly mortgage payment amount, perhaps considerably. Additionally, you may be given the option of pulling out some of the equity in your house by "cashing out" some money to fix up your home, consolidate debt, or plan a special vacation. You might have the option to refinance into a shorter-term mortgage program, giving you the ability to build up your equity faster.
The Cost
Of course, you will have to pay for the process of refinancing. You'll pay the same sort of expenses and fees as you did with your present home loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might think about paying points to reduce your interest rate. If you pay (on average) three percent of the loan amount up front, your savings for the life of the refinanced loan can be substantial. Please consult with a tax professional before acting on advice that the points paid may be deducted on your taxes.
Speaking of taxes, if you lower your interest rate, it follows that you will also be reducing the paid interest amount that you can deduct on your taxes. This is another cost that some borrowers take into consideration. We can help you do the math! Call us at 2039758552.
All things considered, for most people the amount of initial costs to refinance will be made up soon in monthly savings. We will help you find out which program is perfect for you, taking into account your cash on hand, how likely you are to sell your house in the near future, and how refinancing will effect your taxes. Call us at 2039758552 to get you started.
Curious about refinancing? Call us: 2039758552.
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