Weighing the Options of Refinancing
 |
 |
 |
In the market for a mortgage? We'll be glad to answer your questions about your mortgage needs! Call us at 952-929-2577. Want to get started? Apply Now.
|
|
|
|
|
Some have said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That could have been sound advice a while back, but since refinancing has been costing less over the last few years, it's a good time to explore the options of a new loan! A refinanced loan can be worth its cost many times over, factoring in the benefits that can come, along with a reduced interest rate.
Benefits
When you refinance, you may have the ability to lower the interest rate and monthly mortgage payment amount, sometimes considerably. Additionally, you might be given the option of pulling out some of your home equity by "cashing out" some funds to remodel your home, consolidate debt, or take your family on a vacation. With lower interest rates, you might also get the chance to build up home equity more quickly by changing to a shorter term loan.
Expenses and Fees
Of course, 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 at the time you got your existing mortgage loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.
Do the Math
You might think about paying points to get a better interest rate. When you pay (on average) three percent of the loan amount at the start, your savings for the life of the new loan can be substantial. You may hear that these points may be tax deductible, but since tax regulations are difficult to keep up with, please consult a tax professional before making decisions based on this.
Another thing about taxes is that once you reduce your interest rate, of course you will also be reducing the interest amount that you will be able to deduct from your federal income taxes. This is one more cost that some borrowers take into consideration. We can help you do the math! Call us at 952-929-2577.
All things considered, for most people the total of initial costs to refinance are 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, whether you are likely to sell your home in the next couple of years, and your money on hand. Call us at 952-929-2577 to get started.
Want to know more about refinancing your home? Give us a call at 952-929-2577.
|
