Is Refinancing Worth the Cost?
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Searching for a mortgage loan? We can assist you! Give us a call at (941) 366-5800. Ready to begin? Apply Online Now.
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It has been said that only if your new interest is at least two points lower, should you refinance your loan. That might have been true years ago, but with the fact that refinancing has been costing less recently, it's never the wrong time to explore the options of a new mortgage! A refinanced mortgage may be worth its cost many times over, factoring in the benefits that it brings, in addition to a reduced interest rate.
Advantages
When you refinance, you might have the ability to reduce the interest rate and monthly mortgage payment , sometimes by a lot. You may also have the ability to "cash out" some of the built-up equity in your home, that you may use to take care of higher interest debt, make home improvements, or finance a vacation. You may have the option to refinance into a shorter-term mortgage loan, giving you the ability to build your home equity quicker.
The Cost
All these benefits do cost something, though. When you refinance, you're paying for a lot of the same things you paid for at the time you obtained your current mortgage loan. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
You might consider paying points to reduce your interest rate. When you pay (on average) 3% of the mortgage loan amount initially, your savings for the term of the new mortgage can be substantial. We recommend that you consult a tax professional before acting on rumors that the paid points may be deducted on your taxes.
One more cost that a borrower may take into account is that a reduced interest rate will reduce the interest amount you will deduct on your federal income taxes. We can help you do the math! Call us at (941) 366-5800.
Ultimately, for most the amount of initial costs to refinance are made up very quickly in savings each month. We can help you explore your options, considering the effect a refinance may have on your taxes, how likely you may be to sell in the near future, and your money on hand. Call us at (941) 366-5800 to get you started.
Curious about refinancing? Call us: (941) 366-5800.