Weighing the Options of Refinancing

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Some have said that only when your new interest is at least 2 points under your current rate, should you refinance your mortgage. Perhaps that was sound advice several years ago, but since refinance costs have been falling recently, it could be time to look into it. A refinanced loan may be worth its cost many times over, because of the advantages that it brings, in addition to a lower interest rate.

Advantages

When you refinance, you may be able to reduce your interest rate and monthly payment amount, perhaps significantly. You also could be given the option of pulling out some of the equity in your home by "cashing out" some funds 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 program, enabling you to build your home equity quicker.

Fees and Expenses

All these advantages do cost something, though. You will have to pay the same types of fees as you did with your current home loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might think about paying points to receive a better interest rate. The amount you will save on the life of the mortgage loan may be significant if you've paid up front about 3% of the new loan total. We recommend that you consult a tax professional before acting on hear-say that any paid points can be deducted on your federal income taxes.

Another cost that a borrower might take into account is that a reduced interest rate will lower the interest amount you will deduct from your taxes. We can help you do the math! Call us at 4152449383.

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

Want to know more 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