When is Refinancing Worth it?
In the market for a mortgage loan? We will be glad to assist you! Call us at (772) 252-6724. Want to get started? Apply Now
It has been said that only if your new interest is at least two points lower, should you refinance your mortgage. That may have been true years ago, but with refinancing dropping in cost in recent years, it's never the wrong time to explore the options of a new mortgage loan! A refinanced mortgage is often worth its cost several times over, because of the benefits that can come, as well as a reduced interest rate.
When you refinance, you might have the ability to lower your interest rate and monthly mortgage payment amount, perhaps by a lot. Additionally, you might be given 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. With lower interest rates, you might also get the chance to build your home equity faster by changing to a shorter-term mortgage loan.
Fees and Expenses
All of these benefits do come with some expense, though. You'll be charged the same types of expenses and fees as you did with your current mortgage. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Do the Math
You might need to pay points (prepaid interest) to attain a better rate of interest. If you pay (on average) three percent of the loan amount up front, your savings for the term of the new mortgage can be great. We recommend that you talk to a tax professional before acting on hear-say that the paid points may be deducted on your federal income taxes.
One more expense that borrowers may consider is that a reduced rate of interest will lower the interest amount you will deduct on your taxes. We can help you do the math! Call us at (772) 252-6724.
Most people find that the monthly savings outweigh the initial expenses of a refinance. We will help you figure out what mortgage program is right for you, looking at 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 (772) 252-6724 to get you started.
Want to know more about refinancing? Give us a call at (772) 252-6724.