Is Refinancing Worth the Cost?
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Shopping for a mortgage loan? We'll be glad to discuss our many mortgage solutions! Call us at (214) 383-9400. Ready to begin? Apply Online Now.
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Ever heard the pearl of wisdom that states you should only refinance if your new interest rate will be at least 2 points below your present rate? That could have been good advice a while back, but with refinancing dropping in cost recently, it's never the wrong time to think about a new mortgage loan! Refinancing has a number of advantages that can make it worth the up-front expenditure many times over.
Benefits
When you refinance, you may be able to lower the interest rate and monthly mortgage payment , perhaps by a lot. You could also have the option to "cash out" a portion of the built-up equity in your residence, that you can use to consolidate debt, make home improvements, or take a vacation. With lower rates, you may also get the chance to build your home equity more quickly by changing to a shorter term mortgage.
The Cost
All these advantages do come with some expense, though. With your refinance, you're paying for basically the same things you were charged for during your original mortgage. Among these might be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Do the Math
You might consider paying points to receive a better interest rate. When you pay (on average) three percent of the mortgage loan amount initially, your savings for the term of the refinanced mortgage loan can be substantial. You might be told that these points can be tax deductible, but as tax regulations are difficult to keep up with, please consult a tax professional before making any decisions based on this.
One more expense that a borrower may consider is that a lower rate of interest will reduce the interest amount you'll be able to deduct on your taxes. We can help you do the math! Call us at (214) 383-9400.
Most borrowers find that the monthly savings quickly outweigh the initial cost of a refinance. We'll help you figure out which mortgage loan program is ideal for you, considering your cash on hand, how likely you are to sell your residence in the next few years, and the effect refinancing will probably have on your taxes. Call us at (214) 383-9400 to get you started.
Want to know more about refinancing? Give us a call: (214) 383-9400.
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