Weighing the Options of Refinancing
Shopping for a mortgage? We'll be glad to discuss your mortgage needs! Call us at 720-598-8300. Want to get started? Apply Online Now.
Some have said that only when your new interest will be at least 2 points lower, should you refinance your loan. That might have been valid a while back, but with refinancing dropping in cost over the last few years, it's never the wrong time to consider a new mortgage loan! Refinancing has a number of advantages that will often make it worth the up-front cost several times over.
Advantages of Refinancing
You might be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with your refinanced mortgage. You might also have the option to "cash out" a portion of your home equity, that you are able use to consolidate debt, add on to your home, or plan a vacation. You could be able to refinance to a shorter-term mortgage, giving you the ability to build up your equity quicker.
Expenses and Fees
As you probably expect, you will have some fees and expenses during your the refinance process. When you refinance, you're paying for many of the same things you were charged for at the time you got your original 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 investigate paying points to be given a better interest rate. Your savings over the life of the mortgage loan could be substantial if you've paid up front about 3% of the new loan balance. Please consult a tax professional before acting on advice that any paid points can be deducted on your federal income taxes.
Another thing about taxes is that when your interest rate is reduced, of course you'll also be lowering the interest amount that you can deduct from your taxes. This is one more cost that some borrowers consider. Call us at 720-598-8300 to help you do the math.
Ultimately, for most people the total of up-front costs to refinance are paid back very quickly in savings each month. We can help you find out your options, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the next couple of years, and your available cash. Call us at 720-598-8300 to get started.
Want to know more about refinancing your home? Give us a call: 720-598-8300.