When is Refinancing Worth it?
Looking for a loan? We'd be thrilled to discuss our many mortgage solutions! Give us a call today at 248-644-1200. Want to get started? Apply Here.
Some have said that only in the case your new interest will be at least two points below your current rate, should you refinance your mortgage. That may have been good advice years ago, but with refinancing dropping in cost recently, it's never the wrong time to explore the options of a new mortgage loan! A refinance can be worth its cost several times over, considering the benefits that may come, along with a lower interest rate.
Advantages of Refinancing
You might be able to bring down your interest rate (sometimes significantly) and make smaller mortgage payments with a refinanced loan. You could also be able to "cash out" a portion of the built-up equity in your home, that you can use to consolidate debt, add on to your home, or take a vacation. With reduced interest rates, you may also get the chance to build your home equity faster by moving to a shorter-term loan.
Expenses and Fees
All these advantages do come with some expense, though. You will have to pay the same types of expenses and fees as with your existing mortgage loan. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying points can result in a better interest rate. Your savings on the life of the loan may be significant if you have paid up front about three percent of the new loan total. Please talk to a tax professional before acting on rumors that these points paid can be deducted on your federal income taxes.
Another expense that borrowers might consider is that a lower interest rate will lower the interest amount you'll deduct on your federal income taxes. We can help you do the math! Call us at 248-644-1200.
In the end, for most the amount of initial costs to refinance will be paid back very quickly in monthly savings. We'll help you determine which mortgage program is perfect for you, considering your cash on hand, how likely you are to sell your home in the near future, and the effect refinancing might have on your taxes. Call us at 248-644-1200 to get started.
Curious about refinancing? Call us: 248-644-1200.
Get a Refinance Quote
Looking to refinance your home? Fill out the following form to get a fast quote from us.