Weighing the Options of Refinancing

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It has been said that only if your new interest will be at least two points lower, should you refinance your loan. Maybe several years ago that was wise advice, but since refinance costs have been getting lower, it could be a good time to look into it. A refinanced mortgage may be worth its cost many times over, considering the benefits that come, along with a reduced interest rate.

Benefits from Refinancing

You might be able to lower your interest rate (sometimes by a lot) and make smaller monthly payments with your refinanced mortgage loan. You also may have the option of pulling out some of the equity in your house by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You could be able to refinance into a shorter-term mortgage, enabling you to build your equity faster.

The Cost

Of course, you'll have to pay for the the refinance process. You'll pay the same kinds of expenses and fees as you did with your existing mortgage loan. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

Paying discount points can result in a lower interest rate. When you pay (on average) three percent of the mortgage loan amount initially, the savings for the life of the new mortgage can be significant. Please consult with a tax professional before acting on advice that the paid points can be deducted on your federal income taxes.

Another cost that borrowers may take into account is that a lower rate of interest will lower the interest amount you will be able to deduct from your federal income taxes. We can help you do the math! Call us at 503-657-3311.

Most borrowers find that the savings per month quickly outweigh the initial expenses of a refinance. We can help you find out your options, considering the effect a refinance could have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at 503-657-3311 to get you started.

Want to know more about refinancing your home? Give us a call: 503-657-3311.