When is Refinancing Worth it?
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In the market for a new mortgage loan? We will be glad to help! Call us at (702) 730-2085. Want to get started? Apply Now. |
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Have you ever heard the pearl of wisdom that says you should only refinance if your new interest rate is at least 2 points lower than your present rate? That could have been valid a while back, but with refinancing dropping in cost in recent years, it is a good time to explore the options of a new loan! Refinancing your mortgage loan has a number of advantages that often make it worth the up-front expenditure several times over.
Advantages
When you refinance, you may have the ability to reduce the interest rate and monthly payment amount, perhaps considerably. You also might have the option of tapping into your home equity by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. You could be able to refinance into a shorter-term mortgage program, giving you the ability to add to your equity faster.
Fees and Expenses
Of course, you will have to pay for your process of refinancing. When you refinance, you're paying for most of the same things you were charged for during your current mortgage loan. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You might offer to pay points (prepaid interest) to get a better rate of interest. If you pay (on average) 3% of the loan amount initially, your savings for the term of the refinanced mortgage can be substantial. You may hear that the points may be deducted on your income taxes, but because tax regulations are ever-changing, we urge you to consult with your tax professional before considering this in your calculations.
One more expense that borrowers may consider is that a reduced interest rate will lower the interest amount you'll be able to deduct from your federal income taxes. Call us at (702) 730-2085 to help you do the math.
Most people find that the monthly savings quickly outweigh the initial expenses of a refinance. We'll help you determine which program is ideal for you, taking into account your cash on hand, how likely you are to sell your residence in the near future, and what effect refinancing may have on your taxes. Call us at (702) 730-2085 to get you started.
Want to know more about refinancing your home? Give us a call at (702) 730-2085.
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