Weighing the Options of Refinancing
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It has been said that only if your new interest is at least 2 points lower, should you refinance your loan. That may have been true a while back, but with refinancing dropping in cost recently, it is a good time to consider a new loan! A refinance is often worth its cost many times over, factoring in the benefits that it brings, along with a reduced interest rate.
Benefits from Refinancing
When you refinance, you could be able to lower the interest rate and monthly payment amount, perhaps considerably. You also might have the option of tapping into the equity in your home by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You might have the option to refinance into a shorter-term mortgage loan, enabling you to add to your equity faster.
Fees and Expenses
Of course, you'll have some fees and expenses during your the refinance process. When you refinance, you are paying for basically the same things you paid for when you obtained your original mortgage. These can include settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
Paying points can help you attain a lower interest rate. If you pay (on average) three percent of the loan amount initially, your savings for the term of the refinanced loan can be great. Please talk to a tax professional before acting on rumors that these points paid can be deducted on your federal income taxes.
An additional expense that borrowers might consider is that a reduced rate of interest will reduce the interest amount you'll deduct from your taxes. We can help you do the math! Call us at 6023326989.
All things considered, for most the amount of initial costs to refinance will be paid back very quickly in monthly savings. We can help you figure out your options, considering the effect a refinance might have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 6023326989 to get started.
Curious about refinancing your home? Call us: 6023326989.