Is Refinancing Worth the Cost?

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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 loan. That might have been accurate years ago, but as refinancing has been costing less recently, it is never the wrong time to think about a new loan! A refinanced loan can be worth its cost many times over, because of the benefits that it brings, in addition to a reduced interest rate.


You may be able to bring down your interest rate (sometimes substantially) and reduce your mortgage payment amount with your refinanced mortgage. You may also have the ability to "cash out" some of your home equity, which you can use to consolidate debts, add on to your home, or take a vacation. You might have the option to refinance into a shorter-term mortgage loan, enabling you to build up your equity faster.

Fees and Expenses

Of course, you'll have to pay for the process of refinancing. With your refinance, you're paying for a lot of the same things you were charged for when you got your existing mortgage loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.

Do the Math

You might consider paying points to receive a better interest rate. When you pay (on average) 3% of the mortgage loan amount initially, your savings for the life of the new loan can be great. You might have heard that these points may be tax deductible, but because tax regulations can be ever-changing, please consult with a tax professional before depending on this.

Another thing about taxes is that if your interest rate is lowered, naturally you'll also be reducing the interest amount that you will be able to deduct from your taxes. This is one more cost that borrowers take into account. We can help you do the math! Call us at 2124733933.

Most people find that the savings per month quickly balance out the up-front expenses of refinancing. We can help you explore what your options are, considering the effect a refinance could have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 2124733933 to get started.

Curious about refinancing your home? Give us a call at 2124733933.