Is Refinancing Worth the Cost?
In the market for a new mortgage loan? We will be glad to assist you! Give us a call at 720-598-8300. Ready to begin? Apply Now.
Ever heard the pearl of wisdom that states you should only refinance if your new interest rate will be at least 2 points below your present one? Maybe that was good advice several years ago, but since refinance costs have been falling recently, it could be time to take a serious look. A refinance is often worth its cost many times over, factoring in the benefits that it brings, along with a reduced interest rate.
When you refinance, you could be able to lower your interest rate and mortgage payment , perhaps considerably. Additionally, you might be given the option of pulling out some of your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or plan a special vacation. With lower interest rates, you may also be able to build up home equity more quickly by moving to a shorter term mortgage loan.
Expenses and Fees
All these benefits do cost something, though. You will have the same sort of fees as with your present mortgage. Included in your costs will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying points can result in a lower interest rate. Your savings over the life of the mortgage loan may be significant if you've paid up front about three percent of the new loan total. You might have heard that these points can be tax deductible, but because tax regulations are difficult to keep up with, we urge you to consult your tax professional before depending on this.
One more expense that borrowers may take into account is that a reduced interest rate will lower the interest amount you'll be able to deduct on your taxes. We can help you do the math! Call us at 720-598-8300.
Most people find that the monthly savings outweigh the initial cost of refinancing. We'll work with you to determine what mortgage loan program is ideal for you, looking at your cash on hand, the likelihood of selling your home in the next few years, and the effect refinancing might have on your taxes. Call us at 720-598-8300 to get started.
Curious about refinancing your home? Give us a call at 720-598-8300.