When is Refinancing Worth it?
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Shopping for a mortgage loan? We'd be thrilled to talk about our many mortgage solutions! Call us at 214.485.2200. Ready to get started? Apply Here.
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Ever heard the pearl of wisdom that states you should only refinance if your new interest rate is at least two points below your existing one? That might have been true a while back, but since refinancing has been costing less recently, it is never the wrong time to consider a new mortgage! A refinance can be worth its cost several times over, factoring in the benefits that can come, in addition to a lower interest rate.
Advantages of Refinancing
You could be able to bring down your interest rate (sometimes significantly) and make smaller mortgage payments with your refinanced mortgage. You also might have the option of pulling out some of your home equity by "cashing out" some money to renovate your home, consolidate debt, or take your family on a vacation. You might have the option to refinance to a shorter-term mortgage, giving you the ability to build up your home equity faster.
Expenses and Fees
As you probably expect, you'll have some fees and expenses during the process of refinancing. You'll have the same kinds of fees as with your existing mortgage loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying points can get you a lower interest rate. The money you will save on the life of the mortgage loan may be significant if you've paid up front about 3% of the new loan total. Please talk to a tax professional before acting on rumors that any paid points can be deducted on your taxes.
An additional cost that borrowers may consider is that a reduced interest rate will reduce the interest amount you will deduct from your taxes. Call us at 214.485.2200 to help you do the math.
Most borrowers find that the savings per month quickly balance out the initial cost of refinancing. We can help you find out what your options are, considering the effect a refinance could have on your taxes, how likely you may be to sell in the next couple of years, and your money on hand. Call us at 214.485.2200 to get you started.
Curious about refinancing your home? Call us: 214.485.2200.
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