Is Refinancing Worth the Cost?
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Are you looking for a new mortgage loan? We'd be thrilled to answer your questions about our mortgage offerings! Give us a call today at 561-447-9580. Ready to begin? Apply Online Now.
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It has been said that only in the case your new interest is at least 2 points below your current rate, should you refinance your loan. Perhaps several years ago that was good advice, but since refinance costs have been getting lower, it could be time to look into it. Refinancing has various advantages that often make it worth the up-front expenditure several times over.
Benefits
You might be able to bring down your interest rate (sometimes substantially) and have smaller mortgage payments with your refinanced mortgage. You may also be able to "cash out" some of the built-up equity in your residence, that you can use to consolidate debt, make home improvements, or finance a vacation. With reduced interest rates, you might also get the chance to build your home equity faster by switching to a shorter-term mortgage loan.
The Cost
All these advantages do cost something, though. You will pay the same types of expenses and fees as with your current home loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying points can result in a lower interest rate. If you pay (on average) three percent of the loan amount at the start, your savings for the term of the new loan can be substantial. Please consult a tax professional before acting on hear-say that these paid points can be deducted on your federal income taxes.
Another thing about taxes is that when you lower your interest rate, naturally you will also be lowering the paid interest amount that you'll be able to deduct from your taxes. This is another expense that some borrowers consider. We can help you do the math! Call us at 561-447-9580.
Most people find that the savings each month balance out the initial expenses of refinancing. We will help you figure out which mortgage loan program is best for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and what effect refinancing may have on your taxes. Call us at 561-447-9580 to get started.
Curious about refinancing? Call us: 561-447-9580.
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