When is Refinancing Worth it?
Looking for a loan? We can assist you! Call me at (901)
240-0758
It has been said that only when your new interest will be at
least two points under your current rate, should you refinance
your loan. That could have been true a while back, but with
refinancing dropping in cost recently, it's a good time to
explore the options of a new loan! Refinancing your mortgage
has a variety of advantages that often make it worth the
up-front cost several times over.
Advantages
When you refinance, you may be able to lower your interest
rate and monthly mortgage payment , perhaps considerably.
Additionally, you may be given the option of pulling out some
of your home equity by "cashing out" a sum of money to fix up
your home, consolidate debt, or take your family on a
vacation. You might have the option to refinance to a
shorter-term mortgage program, enabling you to build your home
equity quicker.
Expenses and Fees
All of these advantages do come with some expense, though. You
will have the same types of expenses and fees as with your
current mortgage loan. Included in your costs may be an
appraisal, underwriting fees, lender's title insurance,
settlement costs, and other fees.
Do the Math
You
could offer to pay points (prepaid interest) to attain a more
favorable interest rate. Your savings on the life of the
mortgage might be substantial if you have paid up front about
3% of the new loan total. Please talk to a tax professional
before acting on advice that any paid points can be deducted
on your federal income taxes.
Another cost that a borrower might consider is that a lower
interest rate will reduce the interest amount you'll be able
to deduct from your federal income taxes. Call us at (662)
429-5100 to help you do the math.
All
things considered, for most the amount of initial costs to
refinance are paid back soon in monthly savings. We can help
you figure out what your options are, considering the effect a
refinance may have on your taxes, how likely you may be to
sell in the next couple of years, and your money on hand.
Want to know more about refinancing? Call us at (901)
240-0758
