Weighing the Options of Refinancing

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Ever hear the old rule of thumb that says you should only refinance if the new interest rate is at least 2 points under your present one? Maybe that was sound advice several years ago, but as refinance costs have been falling recently, it may be a good time to take a serious look. A refinance may be worth its cost several times over, factoring in the advantages that it brings, in addition to a lower interest rate.

Benefits from Refinancing

You could be able to bring down your interest rate (sometimes by a lot) and have smaller monthly payments with your refinanced mortgage. Additionally, you might 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. You may have the option to refinance to a shorter-term mortgage, enabling you to add to your equity quicker.

The Cost

All these benefits do cost something, though. You will pay the same kinds of fees as with your current mortgage. Among these may be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Do the Math

You might look into paying points to receive a reduced interest rate. If you pay (on average) 3% of the mortgage loan amount up front, the savings for the life of the refinanced mortgage loan can be substantial. We recommend that you consult with a tax professional before acting on hear-say that these points paid may be deducted on your federal income taxes.

One more expense that a borrower may take into account is that a reduced rate of interest will reduce the interest amount you'll be able to deduct from your federal income taxes. We can help you do the math! Call us at 4152449383.

Most people find that the monthly savings quickly balance out the initial expenses of refinancing. We can help you explore what your options are, considering the effect a refinance may have on your taxes, how likely you may be to sell in the near future, and your money on hand. Call us at 4152449383 to get you started.

Curious about refinancing? Call us: 4152449383.

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Dick Lepre NMLS #302379

LendUS, LLC dba RPM Mortgage - NMLS ID #1938

3240 Stone Valley Road West
Alamo, CA 94507