Weighing the Options of Refinancing

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It has been said that only if your new interest will be at least 2 points lower, should you refinance your mortgage. Maybe that was good advice a number of years ago, but as refinance costs have been falling recently, it may be a good time to look into it. Refinancing your mortgage loan has a number of benefits that will often make it worth the up-front expenditure a few times over.


You could be able to lower your interest rate (sometimes significantly) and make smaller mortgage payments with a refinanced mortgage loan. You may also have the option to "cash out" some of your home equity, which you can use to consolidate debt, make home improvements, or finance a vacation. You could be able to refinance to a shorter-term mortgage program, enabling you to add to your equity faster.

Fees and Expenses

All these advantages do come with some expense, though. When you refinance, you're paying for a lot of the same things you paid for during your original mortgage loan. Among these might be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Doing the Math

You might consider paying points to reduce your interest rate. The money you will save on the life of the mortgage loan may be significant if you have paid up front about three percent of the new loan balance. Please talk to a tax professional before acting on rumors that the points paid may be deducted on your taxes.

Another thing about taxes is that if your interest rate is reduced, it follows that you'll also be reducing the interest amount that you may deduct on your taxes. This is one more cost that borrowers consider. We can help you do the math! Call us at 516-431-2009.

Ultimately, for most borrowers the total of up-front costs to refinance will be paid back soon in monthly savings. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your cash on hand. Call us at 516-431-2009 to get started.

Curious about refinancing your home? Call us at 516-431-2009.

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Riverside Funding Corp.

670 Long Beach Blvd, S119
Long Beach, NY 11561