When is Refinancing Worth it?
In the market for a new mortgage loan? We can assist you! Give us a call at (440) 234-9660. Ready to get started? Apply Here.
Some have said that only in the case your new interest is at least 2 points below your current rate, should you refinance your mortgage. That might have been true years ago, but with refinancing dropping in cost recently, it is never the wrong time to think about a new mortgage loan! A refinanced loan is often worth its cost several times over, considering the advantages that come, along with a reduced interest rate.
Benefits from Refinancing
You could be able to bring down your interest rate (sometimes by a lot) and reduce your monthly mortgage payment amount with a refinanced loan. You might also have the option to "cash out" a portion of your equity, that you will be able use to consolidate debt, improve your home, or finance a vacation. You might be able to refinance into a shorter-term mortgage loan, giving you the ability to add to your equity faster.
Fees and Expenses
All of these advantages do come with some expense, though. You'll have the same sort of fees as with your present home loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might investigate paying points to get a reduced interest rate. If you pay (on average) 3% of the mortgage loan amount at the start, your savings for the life of the new mortgage can be great. You might be told that the points can be deducted on your income taxes, but as tax regulations are ever-changing, please consult a tax professional before depending on this.
Another thing about taxes is that once your interest rate is reduced, of course you will also be lowering the interest amount that you may deduct from your taxes. This is one more cost that borrowers take into consideration. Call us at (440) 234-9660 to help you do the math.
In the end, for most the amount of initial costs to refinance are paid back very quickly in monthly savings. We can help you explore your options, considering the effect a refinance might have on your taxes, whether you are likely to sell your home in the near future, and your money on hand. Call us at (440) 234-9660 to get you started.
Want to know more about refinancing? Give us a call at (440) 234-9660.