When is Refinancing Worth it?
 |
 |
 |
Shopping for a mortgage loan? We'd be thrilled to talk about our mortgage offerings! Give us a call today at (760) 943-7200. Want to get started? Apply Here.
|
|
|
|
|
Ever hear the pearl of wisdom that states you should only refinance if your new interest rate will be at least two points lower than your present one? That may have been valid years ago, but since refinancing has been costing less in recent years, it is never the wrong time to explore the options of a new mortgage loan! A refinance can be worth its cost several times over, because of the benefits that come, in addition to a reduced interest rate.
Advantages of Refinancing
You may be able to bring down your interest rate (sometimes by a lot) and make smaller mortgage payments with a refinanced mortgage loan. Additionally, you could have the option of pulling out some of your home equity by "cashing out" a sum of money to renovate your home, consolidate debt, or take your family on a vacation. You may be able to refinance to a shorter-term mortgage program, giving you the ability to add to your equity faster.
Fees and Expenses
All of these advantages do come with some expense, though. You will be charged the same types of fees as you did with your current mortgage loan. These may include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.
Doing the Math
Paying points can result in a lower interest rate. If you pay (on average) 3% of the mortgage loan amount up front, your savings for the life of the new loan can be substantial. Please consult a tax professional before acting on advice that these paid points may be deducted on your federal income taxes.
Another thing about taxes is that once you bring down your interest rate, it follows that you'll also be lowering the paid interest amount that you can deduct on your federal income taxes. This is one more cost that some borrowers take into consideration. We can help you do the math! Call us at (760) 943-7200.
Most people find that the monthly savings outweigh the initial cost of refinancing. We'll help you determine what loan program is perfect for you, taking into account your cash on hand, the likelihood of selling your home in the next few years, and what effect refinancing may have on your taxes. Call us at (760) 943-7200 to get you started.
Curious about refinancing? Give us a call: (760) 943-7200.