When is Refinancing Worth it?

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Some have said that only when your new interest is at least two points lower, should you refinance your mortgage. That might have been good advice years ago, but with refinancing dropping in cost recently, it's never the wrong time to explore the options of a new loan! Refinancing your loan has a variety of advantages that often make it worth the up-front cost a few times over.


You might be able to lower your interest rate (sometimes significantly) and make smaller monthly payments with your refinanced loan. You also might have the option of tapping into your home equity by "cashing out" some funds to renovate your home, consolidate debt, or plan a special vacation. You may have the option to refinance to a shorter-term mortgage loan, enabling you to add to your equity quicker.

The Cost

All of these advantages do come with some expense, though. With your refinance, you are paying for basically the same things you were charged for at the time you got your original mortgage loan. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Doing the Math

You might look into paying points to reduce your interest rate. The money you'll save on the life of the mortgage loan might be substantial if you've paid up front about three percent of the new loan total. You might have heard that the points can be tax deductible, but because tax regulations can be ever-changing, we urge you to consult with your tax professional before depending on this.

Another thing about taxes is that once your interest rate is lowered, it follows that you will also be lowering the paid interest amount that you'll be able to deduct from your taxes. This is another expense that some borrowers take into account. We can help you do the math! Call us at 4152449383.

All things considered, for most borrowers the total of initial costs to refinance will be paid back soon in monthly savings. We can help you explore what your options are, considering the effect a refinance might have on your taxes, whether you are likely to sell your home in the near future, and your available cash. Call us at 4152449383 to get you started.

Want to know more about refinancing your home? Call us at 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