Is Refinancing Worth the Cost?
Are you looking for a new mortgage? We can assist you! Give us a call today at 248-644-1200. Want to get started? Apply Here.
It has been said that only in the case your new interest will be at least two points under your current rate, should you refinance your mortgage. That might have been valid a while back, but with refinancing dropping in cost recently, it's a good time to consider a new mortgage loan! A refinanced loan can be worth its cost many times over, factoring in the benefits that it brings, along with a lower interest rate.
You may be able to lower your interest rate (sometimes by a lot) and have smaller mortgage payments with your refinanced mortgage. You might also be able to "cash out" a portion of the built-up equity in your residence, which you will be able use to consolidate debt, make home improvements, or take a vacation. You might be able to refinance to a shorter-term mortgage loan, enabling you to build up your equity faster.
All these benefits do cost something, though. When you refinance, you're paying for basically the same things you paid for during your existing mortgage loan. These could include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Doing the Math
Paying points can help you get a better interest rate. Your savings over the life of the mortgage could be substantial if you have paid up front about 3% of the new loan total. You may hear that these points can be tax deductible, but since tax regulations are difficult to keep up with, we urge you to consult with a tax professional before depending on this.
Another thing about taxes is that when you bring down your interest rate, it follows that you will also be reducing the paid interest amount that you'll be able to deduct from your taxes. This is another cost that some borrowers take into account. We can help you do the math! Call us at 248-644-1200.
Most people find that the savings each month quickly balance out the up-front expenses of a refinance. We'll work with you to determine which mortgage loan program is right for you, considering your cash on hand, the likelihood of selling your home in the next few years, and how refinancing may effect your taxes. Call us at 248-644-1200 to get you started.
Want to know more about refinancing your home? Give us a call: 248-644-1200.