Is Refinancing Worth the Cost?
Curious about refinancing your home? Give us a call: 480-282-3662.
Some have said that only in the case your new interest will be at least two points lower, should you refinance your loan. Maybe that was good advice a number of years ago, but as refinance costs have been falling recently, it may be time to take a serious look. Refinancing has a variety of advantages that often make it worth the up-front cost a few times over.
You may be able to bring down your interest rate (sometimes substantially) and make smaller monthly payments with a refinanced loan. You also could be given the option of tapping into the equity in your home by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. You could have the option to refinance to a shorter-term mortgage, giving you the ability to add to your equity faster.
Expenses and Fees
All of these advantages do cost something, though. With your refinance, you're paying for basically the same things you paid for at the time you got your existing mortgage loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
You might have to pay a penalty if you refinance your existing mortgage loan too soon. It all depends on your present loan contract. However, some of these penalties apply just to the first several years of your mortgage. We will help you figure it out: contact us at 480-282-3662.
Doing the Math
You might investigate paying points to be given a lower interest rate. The money you'll save over the life of the mortgage may be significant if you have paid up front about 3% of the new loan balance. You might hear that points may be tax deductible, but since tax regulations can be ever-changing, please consult your tax professional before considering this in your calculations.
Speaking of taxes, when your interest rate is reduced, of course you'll also be reducing the interest amount that you'll be able to deduct from your federal income taxes. This is another expense that borrowers consider. We can help you do the math! Call us at 480-282-3662.
Most borrowers find that the savings each month balance out the initial expenses of a refinance. We'll work with you to find out which loan program is best for you, looking at your cash on hand, the likelihood of selling your residence in the next few years, and how refinancing might effect your taxes. Call us at 480-282-3662 to get you started.
Shopping for a mortgage loan? We'd be thrilled to answer your questions about our many mortgage solutions! Give us a call today at 480-282-3662. Want to get started? Apply Here