Weighing the Options of Refinancing

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Some have said that only when your new interest will be at least two points below your current rate, should you refinance your loan. Maybe that was good advice several years ago, but as refinance costs have been falling recently, it could be a good time to look into it. Refinancing your mortgage loan has some benefits that will often make it worth the initial cost several times over.

Benefits from Refinancing

When you refinance, you could be able to reduce the interest rate and mortgage payment, perhaps considerably. Additionally, you might be given the option of tapping into your home equity by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. You may be able to refinance into a shorter-term mortgage loan, giving you the ability to add to your equity quicker.

Expenses and Fees

Of course, you'll have some fees and expenses during your refinance process. You will be charged the same types of expenses and fees as with your current mortgage loan. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.

Do the Math

Paying points can get you a better interest rate. The money you'll save over the life of the mortgage loan may be significant if you have paid upfront about 3% of the new loan total. We recommend that you consult with a tax professional before acting on advice that the points paid may be deducted on your federal income taxes.

An additional cost that borrowers may take into account is that a reduced interest rate will lower the interest amount you will be able to deduct on your taxes. We can help you do the math! Call us at 6269184592.

Most people find that the savings each month outweigh the up-front cost of a refinance. We can help you explore what your options are, considering the effect a refinance may have on your taxes, whether you are likely to sell your home in the near future, and your available cash.

Want to know more about refinancing? Call us at ?(626)918-4592.