When is Refinancing Worth it?
Want to know more about refinancing your home? Call us: 503-243-5626.
Some have said that only in the case your new interest is at least two points under your current rate, should you refinance your mortgage. Perhaps several years ago that was sage advice, but as refinance costs have been falling recently, it may be time to take a serious look. Refinancing has various benefits that will often make it worth the up-front expenditure many times over.
You could be able to lower your interest rate (sometimes substantially) and reduce your monthly payment amount with a refinanced mortgage. Additionally, you may be given the option of pulling out some of the equity in your property by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. With reduced rates, you may also get the chance to build your home equity more quickly by changing to a shorter-term mortgage.
All of these advantages do come with some expense, though. You'll be charged the same types of expenses and fees as 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.
You may have to pay a penalty if you refinance your existing mortgage too soon. This depends on the rules of your present mortgage loan. These penalties may just apply for the first year or two. We'll help you with the details: contact us at 503-243-5626.
Do the Math
You could offer to pay points (prepaid interest) to gain a lower rate of interest. Your savings over the life of the mortgage could be significant if you've paid up front about three percent of the new loan total. Please talk to a tax professional before acting on rumors that the paid points may be deducted on your federal income taxes.
Another thing about taxes is that if you bring down your interest rate, naturally you'll also be lowering the interest amount that you may deduct from your taxes. This is another expense that some borrowers take into consideration. Call us at 503-243-5626 to help you do the math.
Most borrowers find that the monthly savings quickly balance out the up-front cost of a refinance. We'll work with you to figure out what loan program is best for you, looking at your cash on hand, the likelihood of selling your house in the near future, and how refinancing can effect your taxes. Call us at 503-243-5626 to get you started.
In the market for a new mortgage? We will be glad to assist you! Give us a call today at 503-243-5626. Want to get started? Apply Now