When is Refinancing Worth it?
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Are you looking for a new mortgage? We'd be thrilled to discuss our many mortgage solutions! Give us a call at (440) 234-9660. Ready to get started? Apply Online Now.
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Some have said that only in the case your new interest will be at least 2 points under your current rate, should you refinance your mortgage. That may have been true years ago, but since refinancing has been costing less recently, it's a good time to consider a new loan! A refinanced loan may be worth its cost many times over, considering the benefits that come, in addition to a lower interest rate.
Advantages of Refinancing
When you refinance, you may be able to lower the interest rate and monthly payment , sometimes significantly. You also could have the option of pulling out some of the equity in your house by "cashing out" some funds to fix up your home, consolidate debt, or plan a special vacation. With reduced rates, you might also be able to build up home equity faster by switching to a shorter-term mortgage loan.
Fees and Expenses
All of these advantages do come with some expense, though. You'll be charged the same sort of fees as with your present mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Do the Math
You might consider paying points to be given a lower interest rate. When you pay (on average) three percent of the mortgage loan amount at the start, the savings for the life of the new mortgage loan can be substantial. Please consult a tax professional before acting on rumors that the points paid may be deducted on your taxes.
One more cost that borrowers may consider is that a reduced interest rate will reduce the interest amount you'll deduct from your federal income taxes. Call us at (440) 234-9660 to help you do the math.
Most borrowers find that the monthly savings balance out the initial cost of a refinance. We will help you determine which mortgage loan program is the right fit for you, taking into account your cash on hand, the likelihood of selling your residence in the near future, and how refinancing can effect your taxes. Call us at (440) 234-9660 to get you started.
Curious about refinancing? Call us: (440) 234-9660.