Is Refinancing Worth the Cost?
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In the market for a new mortgage loan? We will be glad to help! Call us at (713) 667-5472. Ready to begin? Apply Now.
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It has been said that only in the case your new interest is at least two points below your current rate, should you refinance your loan. Maybe several years ago that was wise advice, but since refinance costs have been getting lower, it may be time to take a serious look. Refinancing has various benefits that will often make it worth the up-front expenditure several times over.
Advantages
When you refinance, you may have the ability to lower your interest rate and monthly mortgage payment amount, sometimes by a lot. Additionally, you might have the option of tapping into the equity in your house by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. With lower rates, you might also get the chance to build up home equity more quickly by changing to a shorter-term mortgage loan.
The Cost
All of these advantages do cost something, though. You'll be charged the same kinds of expenses and fees as you did with your existing home loan. Included in your costs can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
Paying discount points can result in a better interest rate. The money you'll save on the life of the mortgage may be substantial if you have paid up front about 3% of the new loan total. You might have heard that points can be deducted on your income taxes, but since tax regulations are ever-changing, please speak with your tax professional before depending on this.
Another expense that a borrower might consider is that a reduced interest rate will lower the interest amount you'll be able to deduct from your federal income taxes. We can help you do the math! Call us at (713) 667-5472.
Most people find that the savings per month quickly outweigh the initial cost of a refinance. We'll work with you to determine what loan program is best for you, looking at your cash on hand, how likely you are to sell your home in the near future, and the effect refinancing could have on your taxes. Call us at (713) 667-5472 to get started.
Curious about refinancing your home? Give us a call at (713) 667-5472.