Weighing the Options of Refinancing
 |
 |
 |
Shopping for a mortgage loan? We'll be glad to talk about our mortgage offerings! Call us at (713) 667-5472. Ready to get started? Apply Now.
|
|
|
|
|
Ever heard the old rule of thumb that states you should only refinance if your new interest rate is at least 2 points below your existing one? Perhaps several years ago that was wise advice, but as refinance costs have been getting lower, it could be a good time to take a serious look. A refinanced loan may be worth its cost many times over, factoring in the benefits that it brings, along with a reduced interest rate.
Benefits
When you refinance, you could have the ability to lower your interest rate and monthly payment , sometimes considerably. You also may be given the option of tapping into your home equity by "cashing out" some money to renovate your home, consolidate debt, or take your family on a vacation. With lower interest rates, you might also be able to build your home equity faster by switching to a shorter-term mortgage.
Fees and Expenses
Of course, you'll have some fees and expenses during your the refinance process. When you refinance, you are paying for basically the same things you were charged for when you obtained your original mortgage. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Doing the Math
Paying points can get you a better interest rate. The amount you'll save on the life of the mortgage may be significant if you have paid up front about 3% of the new loan balance. You might hear that these points can be deducted on your income taxes, but since tax regulations can be difficult to keep up with, we urge you to speak with your tax professional before depending on this.
One more expense that borrowers may consider is that a reduced rate of interest will lower the interest amount you'll deduct from your taxes. We can help you do the math! Call us at (713) 667-5472.
In the end, for most the total of initial costs to refinance are made up very quickly in savings each month. We'll work with you to determine which program is best for you, considering your cash on hand, the likelihood of selling your residence in the next few years, and how refinancing might effect your taxes. Call us at (713) 667-5472 to get you started.
Curious about refinancing? Call us at (713) 667-5472.