When is Refinancing Worth it?

Curious about refinancing? Call us at 469-322-4391.

It has been said that only when your new interest will be at least 2 points lower, should you refinance your loan. That might have been valid years ago, but with refinancing dropping in cost recently, it is a good time to think about a new mortgage loan! A refinance is often worth its cost many times over, because of the benefits that may come, in addition to a lower interest rate.

Advantages
When you refinance, you could be able to lower your interest rate and mortgage payment , sometimes by a lot. You also might have the option of pulling out some of the equity in your property by "cashing out" some money to renovate your home, consolidate debt, or take your family on a vacation. With reduced interest rates, you may also get the chance to build up home equity more quickly by moving to a shorter-term loan.

The Cost
All these advantages do come with some expense, though. When you refinance, you're paying for most of the same things you were charged for during your original mortgage loan. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

When you refinance your current loan too soon, you might have a penalty to pay. It depends on the terms of your current loan. Some of these penalties just apply for the first couple of years. We'll help you figure it out: contact us at 469-322-4391.

Doing the Math
Paying points can help you attain a lower interest rate. The amount you'll save over the life of the loan may be substantial if you've paid up front about 3% of the new loan balance. You may have heard that the points may be deducted on your income taxes, but since tax regulations are difficult to keep up with, we urge you to speak with a tax professional before depending on this.

One more expense that borrowers might take into account is that a reduced interest rate will lower the interest amount you'll deduct from your federal income taxes. Call us at 469-322-4391 to help you do the math.

All things considered, for most borrowers the amount of initial costs to refinance are paid back soon in savings each month. We will help you determine which program is best for you, taking into account your cash on hand, how likely you are to sell your house in the near future, and what effect refinancing will probably have on your taxes. Call us at 469-322-4391 to get started.

Are you looking for a mortgage? We can assist you! Call us at 469-322-4391. Want to get started? Apply Here.