When is Refinancing Worth it?
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In the market for a mortgage loan? We'd be thrilled to answer your questions about our mortgage offerings! Call us at (941) 366-5800. Ready to begin? Apply Now.
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It has been said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That could have been true years ago, but with refinancing dropping in cost in recent years, it's a good time to consider a new mortgage loan! A refinance can be worth its cost several times over, considering the advantages that it brings, along with a reduced interest rate.
Benefits from Refinancing
You could be able to bring down your interest rate (sometimes substantially) and make smaller mortgage payments with your refinanced mortgage loan. You also may be given the option of pulling out some of the equity in your home by "cashing out" a sum of money to fix up your home, consolidate debt, or plan a special vacation. With lower rates, you might also be able to build up home equity faster by changing to a shorter term mortgage loan.
The Cost
As you probably know, you'll have some fees and expenses during the process of refinancing. You will have the same types of fees as with your existing mortgage. These may include settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.
Do the Math
Paying points can help you attain a lower interest rate. When you pay (on average) 3% of the mortgage loan amount initially, your savings for the life of the new mortgage loan can be significant. Please consult a tax professional before acting on hear-say that these points paid may be deducted on your federal income taxes.
Another expense that a borrower may take into account is that a lower rate of interest will reduce the interest amount you'll be able to deduct from your taxes. Call us at (941) 366-5800 to help you do the math.
Most borrowers find that the monthly savings balance out the up-front expenses of a refinance. We can help you figure out what your options are, considering the effect a refinance might have on your taxes, how likely you may be to sell in the next couple of years, and your cash on hand. Call us at (941) 366-5800 to get you started.
Want to know more about refinancing? Give us a call at (941) 366-5800.