Weighing the Options of Refinancing
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In the market for a new mortgage loan? We will be glad to assist you! Call us at 425-508-9988. Want to get started? Apply Online Now.
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It has been said that only in the case your new interest will be at least two points lower, should you refinance your loan. That may have been good advice years ago, but with the fact that refinancing has been costing less in recent years, it is a good time to think about a new loan! Refinancing your mortgage has some benefits that often make it worth the up-front expenditure a few times over.
Advantages
You could be able to lower your interest rate (sometimes by a lot) and have smaller mortgage payments with a refinanced mortgage. You also might be given the option of pulling out some of the equity in your home by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. You may have the option to refinance into a shorter-term mortgage program, giving you the ability to add to your equity quicker.
Fees and Expenses
As you probably know, you'll have some fees and expenses during your the refinance process. When you refinance, you're paying for basically the same things you paid for during your existing mortgage loan. These can include settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Doing the Math
You might need to pay discount points (prepaid interest) to attain a lower rate of interest. The amount you'll save over the life of the loan could be significant if you've paid up front about 3% of the new loan balance. You might be told that the points can be deducted on your income taxes, but since tax regulations can be ever-changing, please consult your tax professional before considering this in your calculations.
Another expense that borrowers might take into account is that a lower rate of interest will lower the interest amount you will be able to deduct from your federal income taxes. We can help you do the math! Call us at 425-508-9988.
In the end, for most the total of up-front costs to refinance will be paid back soon in monthly savings. We can help you figure out what your options are, considering the effect a refinance might have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 425-508-9988 to get started.
Curious about refinancing your home? Call us: 425-508-9988.