Weighing the Options of Refinancing

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It has been said that only if your new interest will be at least two points lower, should you refinance your mortgage. That could have been accurate years ago, but with refinancing dropping in cost recently, it's never the wrong time to think about a new loan! Refinancing has a variety of advantages that can make it worth the initial cost several times over.


You could be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced mortgage loan. You might also have the option to "cash out" some of your equity, which you can use to take care of higher interest debts, improve your home, or take a vacation. With reduced rates, you might also get the chance to build up home equity more quickly by changing to a shorter-term loan.

The Cost

As you probably expect, you'll have to pay for the the refinance process. When you refinance, you're paying for basically the same things you were charged for at the time you got your existing mortgage. Among these will be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.

Doing the Math

You might need to pay discount points (prepaid interest) to gain a more favorable rate of interest. Your savings on the life of the loan may be substantial if you have paid up front about three percent of the new loan balance. We recommend that you consult with a tax professional before acting on hear-say that any paid points may be deducted on your taxes.

Another thing about taxes is that when your interest rate is lowered, naturally you will also be lowering the interest amount that you'll be able to deduct on your taxes. This is one more expense that borrowers consider. Call us at 9727982110 to help you do the math.

Most people find that the monthly savings quickly balance out the initial expenses of a refinance. We'll work with you to figure out what program is best for you, looking at your cash on hand, the likelihood of selling your home in the near future, and the effect refinancing will have on your taxes. Call us at 9727982110 to get started.

Curious about refinancing your home? Call us: 9727982110.

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4815 State Hwy 121 Suite 2
The Colony, TX 75056