When is Refinancing Worth it?
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Shopping for a mortgage? We'd be thrilled to answer your questions about our mortgage offerings! Call us at 303-471-4445. Want to get started? Apply Here.
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It has been said that only when your new interest will be at least two points below your current rate, should you refinance your mortgage. Maybe several years ago that was wise advice, but since refinance costs have been getting lower, it could be time to look into it. A refinance is often worth its cost several times over, because of the advantages that come, as well as a lower interest rate.
Benefits
When you refinance, you may be able to lower your interest rate and monthly mortgage payment , sometimes significantly. You also could be given the option of tapping into the equity in your home by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. With lower rates, you might also be able to build up home equity more quickly by switching to a shorter term mortgage loan.
Expenses and Fees
All of these advantages do cost something, though. You'll have to pay the same kinds of fees as you did with your existing mortgage loan. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You could offer to pay points (prepaid interest) to attain a more favorable interest rate. Your savings on the life of the loan could be significant if you've paid up front about 3% of the new loan total. Please consult with a tax professional before acting on rumors that these points paid can be deducted on your federal income taxes.
Speaking of taxes, once your interest rate is lowered, it follows that you will also be lowering the paid interest amount that you may deduct from your federal income taxes. This is another cost that borrowers take into account. We can help you do the math! Call us at 303-471-4445.
Most borrowers find that the monthly savings outweigh the initial expenses of a refinance. We'll help you determine what mortgage program is ideal for you, looking at your cash on hand, the likelihood of selling your house in the near future, and how refinancing might effect your taxes. Call us at 303-471-4445 to get you started.
Want to know more about refinancing your home? Give us a call: 303-471-4445.
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