Is Refinancing Worth the Cost?
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In the market for a mortgage? We'll be glad to discuss our many mortgage solutions! Give us a call at (713) 667-5472. Want to get started? Apply Here.
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Ever heard the pearl of wisdom that states you should only consider refinancing if the new interest rate will be at least 2 points lower than your current rate? That may have been true a while back, but as refinancing has been costing less recently, it is a good time to explore the options of a new mortgage! A refinance may be worth its cost several times over, because of the benefits that it brings, as well as a reduced interest rate.
Advantages
When you refinance, you may have the ability to lower the interest rate and monthly payment amount, perhaps significantly. Additionally, you might be given the option of tapping into your home equity by "cashing out" some funds to fix up your home, consolidate debt, or plan a special vacation. You could have the option to refinance into a shorter-term mortgage, enabling you to build your home equity faster.
Expenses and Fees
Of course, you'll have some fees and expenses during the process of refinancing. When you refinance, you are paying for most of the same things you paid for at the time you got your existing mortgage. Among these might be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Do the Math
You might investigate paying points to reduce your interest rate. If you pay (on average) 3% of the mortgage loan amount up front, the savings for the life of the new mortgage can be substantial. Please consult a tax professional before acting on hear-say that the points paid may be deducted on your federal income taxes.
An additional expense that borrowers might consider is that a reduced rate of interest 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 borrowers find that the savings each month balance out the up-front cost of refinancing. We will work with you to figure out what mortgage program is the ideal fit for you, taking into account your cash on hand, how likely you are to sell your residence in the next few years, and the effect refinancing will probably have on your taxes. Call us at (713) 667-5472 to get started.
Want to know more about refinancing your home? Give us a call: (713) 667-5472.