When is Refinancing Worth it?
Searching for mortgage advice? We can help! Give us a call today at 516-431-2009. Ready to get started? Apply Online Now.
It has been said that only if your new interest is at least two points lower, should you refinance your mortgage. That could have been accurate years ago, but since refinancing has been costing less recently, it's a good time to think about a new mortgage! A refinanced mortgage is often worth its cost many times over, considering the advantages that it brings, along with a lower interest rate.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes by a lot) and reduce your monthly mortgage payment amount with your refinanced loan. You might also have the ability to "cash out" some of the built-up equity in your home, which you can use to consolidate debts, add on to your home, or take a vacation. You may have the option to refinance into a shorter-term mortgage program, giving you the ability to build your home equity quicker.
All these benefits do come with some expense, though. With your refinance, you are paying for basically the same things you were charged for during your current mortgage. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might look into paying points to reduce your interest rate. When you pay (on average) 3% of the mortgage loan amount at the start, the savings for the life of the new loan can be great. You may hear that points may be tax deductible, but because tax regulations are ever-changing, please consult a tax professional before depending on this.
Speaking of taxes, once your interest rate is reduced, naturally you will also be reducing the interest amount that you'll be able to deduct on your taxes. This is another cost that some borrowers consider. Call us at 516-431-2009 to help you do the math.
In the end, for most borrowers the amount of up-front costs to refinance are made up very quickly in savings each month. 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 near future, and your money on hand. Call us at 516-431-2009 to get you started.
Curious about refinancing your home? Give us a call: 516-431-2009.