Is Refinancing Worth the Cost?
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Looking for mortgage advice? We will be glad to assist you! Give us a call today at (941) 366-5800. Ready to begin? Apply Now.
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It has been said that only when your new interest is at least 2 points lower, should you refinance your loan. Perhaps that was good advice a number of years ago, but as refinance costs have been falling recently, it may be time to take a serious look. Refinancing your mortgage has a variety of benefits that often make it worth the up-front expenditure many times over.
Benefits
When you refinance, you might be able to lower your interest rate and monthly payment , perhaps significantly. You might also be able to "cash out" a portion of your home equity, which you will be able use to consolidate debt, make home improvements, or finance a vacation. With reduced rates, you might also get the chance to build up home equity more quickly by changing to a shorter-term mortgage.
The Cost
All these benefits do come with some expense, though. When you refinance, you're paying for most of the same things you paid for during your current mortgage loan. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might investigate paying points to reduce your interest rate. The money you will save on the life of the mortgage might be significant if you've paid up front about 3% of the new loan total. Please talk to a tax professional before acting on hear-say that the points paid can be deducted on your taxes.
Another cost that borrowers may consider is that a lower rate of interest will reduce the interest amount you will deduct from your federal income taxes. We can help you do the math! Call us at (941) 366-5800.
Most borrowers find that the savings per month quickly outweigh the up-front expenses of a refinance. We can help you find out what your options are, considering the effect a refinance may have on your taxes, how likely you may be to sell in the next couple of years, and your available cash. Call us at (941) 366-5800 to get you started.
Want to know more about refinancing? Give us a call: (941) 366-5800.