Is Refinancing Worth the Cost?
In the market for a new mortgage loan? We will be glad to help! Give us a call at 248-644-1200. Want to get started? Apply Now.
Some have said that only in the case your new interest will be at least two points under your current rate, should you refinance your mortgage. Maybe several years ago that was good advice, but as refinance costs have been falling recently, it could be time to look into it. A refinance can be worth its cost many times over, factoring in the benefits that it brings, as well as a reduced interest rate.
When you refinance, you could be able to reduce the interest rate and mortgage payment , perhaps significantly. You could also be able to "cash out" a portion of the built-up equity in your residence, which you are able use to consolidate debts, add on to your home, or take a vacation. With reduced rates, you might also be able to build your home equity faster by moving to a shorter term mortgage loan.
Expenses and Fees
All of these advantages do cost something, though. With your refinance, you're paying for basically the same things you were charged for during your existing mortgage. These can include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Do the Math
You might investigate paying points to reduce your 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 loan can be great. You may have heard that points can be deducted on your income taxes, but since tax regulations are ever-changing, please consult a tax professional before making decisions based on this.
An additional expense that borrowers may take into account is that a reduced interest rate will lower the interest amount you'll deduct on your taxes. We can help you do the math! Call us at 248-644-1200.
Most people find that the savings each month quickly outweigh the up-front cost of a refinance. We can help you find out what your options are, considering the effect a refinance might have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 248-644-1200 to get started.
Want to know more about refinancing? Give us a call: 248-644-1200.