When is Refinancing Worth it?
In the market for a mortgage loan? We will be glad to help! Call us at (334) 285-8850. Ready to get started? Apply Online Now.
It has been said that only in the case your new interest is at least two points below your current rate, should you refinance your loan. That might have been accurate years ago, but with refinancing dropping in cost in recent years, it's a good time to explore the options of a new mortgage! A refinanced mortgage can be worth its cost many times over, factoring in the benefits that it brings, along with a lower interest rate.
Advantages of Refinancing
You may be able to lower your interest rate (sometimes substantially) and reduce your monthly mortgage payment amount with a refinanced mortgage loan. You also might have the option of tapping into your home equity by "cashing out" a sum of money to fix up your home, consolidate debt, or take your family on a vacation. You could have the option to refinance into a shorter-term mortgage, enabling you to add to your equity faster.
As you probably know, you will have to pay for your the refinance process. You'll have to pay the same types of fees as you did with your existing mortgage loan. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
You might investigate paying points to reduce your interest rate. Your savings on the life of the loan may be substantial if you've paid up front about 3% of the new loan total. Please consult a tax professional before acting on rumors that these points paid can be deducted on your taxes.
One more expense that a borrower may consider is that a reduced rate of interest will lower the interest amount you'll deduct on your federal income taxes. Call us at (334) 285-8850 to help you do the math.
Most borrowers find that the monthly savings balance out the initial expenses of refinancing. We can help you explore your options, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at (334) 285-8850 to get started.
Curious about refinancing your home? Give us a call at (334) 285-8850.