Is Refinancing Worth the Cost?
|Searching for a loan? We will be glad to assist you! Give us a call today at (206) 234-7544. Want to get started? Apply Now.|
Some have said that only if your new interest is at least 2 points below your current rate, should you refinance your loan. Maybe that was good advice a number of years ago, but as refinance costs have been getting lower, it could be time to take a serious look. Refinancing has some advantages that often make it worth the initial cost many times over.
When you refinance, you could have the ability to lower the interest rate and monthly payment amount, perhaps significantly. Additionally, you could be given the option of tapping into the equity in your home by "cashing out" a sum of money to renovate your home, consolidate debt, or take your family on a vacation. You may have the option to refinance into a shorter-term mortgage loan, giving you the ability to build up your equity faster.
Expenses and Fees
Of course, you'll have to pay for your the refinance process. You'll have the same sort of expenses and fees as with your existing mortgage loan. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
Paying points can get you a better interest rate. If you pay (on average) three percent of the mortgage loan amount at the start, your savings for the term of the new loan can be significant. Please consult a tax professional before acting on hear-say that the points paid may be deducted on your taxes.
An additional cost that a borrower might consider is that a lower interest rate will reduce the interest amount you will be able to deduct on your taxes. We can help you do the math! Call us at (206) 234-7544.
Most borrowers find that the monthly savings outweigh the up-front cost of refinancing. We can help you explore your options, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the near future, and your cash on hand. Call us at (206) 234-7544 to get you started.