When is Refinancing Worth it?

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Ever hear the old rule of thumb that states you should only consider refinancing if your new interest rate is at least 2 points under your present one? That might have been good advice years ago, but with refinancing dropping in cost recently, it's a good time to think about a new loan! A refinanced mortgage loan can be worth its cost many times over, because of the benefits that can come, along with a reduced interest rate.


When you refinance, you could have the ability to lower the interest rate and monthly payment amount, perhaps considerably. You could also have the ability to "cash out" some of your equity, that you are able use to take care of higher interest debts, improve your home, or plan a vacation. You might be able to refinance to a shorter-term mortgage, giving you the ability to build your home equity faster.

Expenses and Fees

Of course, you will have to pay for your process of refinancing. You will pay the same kinds of fees as with your current mortgage loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

Paying discount points can result in a better interest rate. If you pay (on average) 3% of the loan amount at the start, your savings for the life of the new loan can be great. Please consult a tax professional before acting on hear-say that these paid points may be deducted on your federal income taxes.

Another cost that borrowers might take into account is that a reduced interest rate will lower the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at 9727982110.

Ultimately, for most the amount of initial costs to refinance will be made up very quickly in savings each month. We can help you figure 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 money on hand. Call us at 9727982110 to get you started.

Want to know more about refinancing? Give us a call at 9727982110.

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4815 State Hwy 121 Suite 2
The Colony, TX 75056