Weighing the Options of Refinancing

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It has been said that only if your new interest is at least two points lower, should you refinance your loan. That may have been true years ago, but with refinancing dropping in cost over the last few years, it is never the wrong time to explore the options of a new mortgage loan! Refinancing has some advantages that can make it worth the up-front expenditure many times over.


You may be able to lower your interest rate (sometimes significantly) and have smaller mortgage payments with your refinanced loan. You may also have the ability to "cash out" some of the built-up equity in your residence, which you can use to consolidate debt, add on to your home, or finance a vacation. You could be able to refinance into a shorter-term mortgage program, giving you the ability to build up your home equity quicker.

The Cost

As you probably expect, you'll have some fees and expenses during your process of refinancing. You'll be charged the same types of expenses and fees as with your existing home loan. These probably include settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Do the Math

You might offer to pay points (prepaid interest) to get a lower rate of interest. When you pay (on average) 3% of the mortgage loan amount initially, your savings for the life of the new mortgage loan can be significant. We recommend that you talk to a tax professional before acting on hear-say that the points paid can be deducted on your taxes.

Speaking of taxes, when your interest rate is reduced, naturally you'll also be reducing the interest amount that you will be able to deduct from your taxes. This is another cost that borrowers consider. We can help you do the math! Call us at 9727982110.

All things considered, for most borrowers the total of up-front costs to refinance are made up very quickly in savings each month. We can help you find out your options, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at 9727982110 to get you started.

Want to know more about refinancing your home? Call us at 9727982110.

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4815 State Hwy 121 Suite 2
The Colony, TX 75056