Is Refinancing Worth the Cost?
Are you looking for a new mortgage loan? We'd be thrilled to answer your questions about your mortgage needs! Call us at (732) 969-9300. Ready to begin? Apply Here.
Some have said that only if your new interest will be at least two points lower, should you refinance your loan. That may have been valid a while back, but with the fact that refinancing has been costing less in recent years, it's never the wrong time to consider a new mortgage! Refinancing has a variety of benefits that can make it worth the up-front cost many times over.
Benefits from Refinancing
You might be able to bring down your interest rate (sometimes significantly) and have smaller mortgage payments with your refinanced mortgage loan. You may also have the ability to "cash out" a portion of the built-up equity in your home, which you will be able use to take care of higher interest debt, make home improvements, or finance a vacation. With reduced rates, you may also be able to build up home equity more quickly by changing to a shorter-term mortgage loan.
Fees and Expenses
All of these advantages do cost something, though. You'll pay the same kinds of fees as you did with your existing home loan. These probably include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and others.
Doing the Math
Paying points can get you a better interest rate. Your savings over the life of the mortgage could be substantial if you have paid up front about 3% of the new loan total. We recommend that you talk to a tax professional before acting on hear-say that any points paid can be deducted on your federal income taxes.
Speaking of taxes, if your interest rate is lowered, it follows that you will also be reducing the interest amount that you may deduct on your federal income taxes. This is another cost that some borrowers take into account. We can help you do the math! Call us at (732) 969-9300.
Most borrowers find that the savings each month quickly balance out the up-front expenses of refinancing. We will help you find out which mortgage loan program is the ideal fit for you, looking at your cash on hand, the likelihood of selling your home in the next few years, and how refinancing can effect your taxes. Call us at (732) 969-9300 to get started.
Curious about refinancing your home? Call us: (732) 969-9300.