Is Refinancing Worth the Cost?
Curious about refinancing your home? Give us a call at 620-662-0091.
It has been said that only in the case your new interest is at least two points under your current rate, should you refinance your mortgage. That could have been sound advice a while back, but with the fact that refinancing has been costing less over the last few years, it is a good time to think about a new loan! A refinance is often worth its cost many times over, considering the benefits that may come, in addition to a reduced interest rate.
Benefits from Refinancing
When you refinance, you could be able to reduce the interest rate and monthly payment amount, perhaps by a lot. You also could have the option of tapping into the equity in your house by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. With reduced interest rates, you might also be able to build your home equity faster by moving to a shorter-term mortgage.
All of these benefits do cost something, though. You'll pay the same sort of fees as you did with your present mortgage loan. These probably include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
If you refinance your existing mortgage too quickly, you might have a penalty . This depends on the rules of your current mortgage. However, some of these penalties apply only to the initial couple of years of the loan. We'll help you with the details: contact us at 620-662-0091.
Doing the Math
You might think about paying points to reduce your interest rate. If you pay (on average) 3% of the mortgage loan amount at the start, the savings for the life of the new mortgage loan can be significant. Please consult with a tax professional before acting on hear-say that any points paid may be deducted on your federal income taxes.
Speaking of taxes, once you bring down your interest rate, of course you'll also be lowering the paid interest amount that you can deduct on your federal income taxes. This is another cost that some borrowers take into account. We can help you do the math! Call us at 620-662-0091.
All things considered, for most borrowers the total of initial costs to refinance are made up very quickly in monthly savings. We'll help you determine which mortgage program is best for you, taking into account your cash on hand, how likely you are to sell your residence in the next few years, and how refinancing may effect your taxes. Call us at 620-662-0091 to get you started.
Shopping for a mortgage loan? We'd be thrilled to answer your questions about your mortgage needs! Give us a call today at 620-662-0091. Ready to get started? Apply Here