Is Refinancing Worth the Cost?
In the market for a new mortgage loan? We can assist you! Call us at 248-644-1200. Want to get started? Apply Now.
Some have said that only if your new interest is at least 2 points lower, should you refinance your mortgage. Maybe that was good advice several years ago, but as refinance costs have been falling recently, it may be a good time to take a serious look. Refinancing has some advantages that often make it worth the initial expenditure several times over.
Benefits from Refinancing
You might be able to lower your interest rate (sometimes by a lot) and reduce your monthly mortgage payment amount with your refinanced mortgage loan. You may also be able to "cash out" some of the built-up equity in your residence, which you may use to take care of higher interest debts, add on to your home, or take a vacation. You could be able to refinance into a shorter-term mortgage program, giving you the ability to build your home equity faster.
All these benefits do cost something, though. You'll have to pay the same kinds of fees as with your current mortgage loan. Included in your costs will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying discount points can help you attain a better interest rate. Your savings over the life of the loan may be significant if you have paid up front about 3% of the new loan total. You might have heard that these points can be deducted on your income taxes, but because tax regulations are ever-changing, please consult your tax professional before considering this in your calculations.
An additional cost that a borrower may consider is that a reduced interest rate will reduce the interest amount you'll be able to deduct from your federal income taxes. We can help you do the math! Call us at 248-644-1200.
All things considered, for most borrowers the total of up-front costs to refinance are paid back very quickly in monthly savings. We'll help you find out which mortgage loan program is ideal for you, taking into account your cash on hand, the likelihood of selling your home in the next few years, and how refinancing could effect your taxes. Call us at 248-644-1200 to get started.
Curious about refinancing? Call us: 248-644-1200.
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