When is Refinancing Worth it?
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It has been said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That could have been true a while back, but with refinancing dropping in cost recently, it's a good time to think about a new mortgage! A refinance is often worth its cost several times over, considering the benefits that it brings, along with a lower interest rate.
When you refinance, you could have the ability to reduce the interest rate and monthly mortgage payment , sometimes by a lot. Additionally, you could have the option of tapping into your home equity by "cashing out" some money to renovate your home, consolidate debt, or plan a special vacation. You may be able to refinance to a shorter-term mortgage, giving you the ability to add to your equity faster.
As you probably expect, you'll have to pay for your process of refinancing. When you refinance, you are paying for basically the same things you were charged for during your current mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
Paying points can result in a lower interest rate. The money you'll save over the life of the mortgage loan could be significant if you've paid up front about 3% of the new loan balance. Please consult with a tax professional before acting on hear-say that the paid points can be deducted on your taxes.
Another expense that borrowers might take into account is that a lower interest rate will lower the interest amount you'll be able to deduct on your federal income taxes. We can help you do the math! Call us at 9727982110.
Most people find that the savings each month balance out the initial cost of refinancing. We can help you figure out what your options are, considering the effect a refinance may have on your taxes, if you are likely to sell your home in the near future, and your cash on hand. Call us at 9727982110 to get you started.
Curious about refinancing your home? Call us: 9727982110.