Weighing the Options of Refinancing

Some have said that only in the case your new interest is at least 2 points lower, should you refinance your loan. That could have been true a while back, but with refinancing dropping in cost in recent years, it is never the wrong time to consider a new loan! A refinance is often worth its cost several times over, considering the advantages that it brings, in addition to a reduced interest rate.

Benefits

When you refinance, you may have the ability to lower the interest rate and mortgage payment , perhaps by a lot. Additionally, you may be given the option of tapping into your home equity by "cashing out" some money to remodel your home, consolidate debt, or take your family on a vacation. You may be able to refinance to a shorter-term mortgage program, giving you the ability to add to your home equity faster.

Fees and Expenses

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

You may have to pay a penalty if you refinance your present mortgage loan too quickly. It all depends on your present mortgage agreement. However, this sort of penalty could apply just to the initial couple of years of the mortgage loan. We will help you sort through the details: contact us at 407-341-4313.

Doing the Math

Paying discount points can help you get a better interest rate. The amount you will save on the life of the mortgage loan might be substantial if you have paid up front about three percent of the new loan total. You might hear that these points can be deducted on your income taxes, but because tax regulations are ever-changing, we urge you to consult with your tax professional before considering this in your calculations.

Another thing about taxes is that once your interest rate is lowered, naturally you'll also be reducing the interest amount that you will be able to deduct on your federal income taxes. This is one more cost that some borrowers consider. We can help you do the math! Call us at 407-341-4313.

Most people find that the savings per month quickly balance out the initial expenses of a refinance. We can help you explore what your options are, considering the effect a refinance might have on your taxes, how likely you may be to sell in the near future, and your available cash. Call us at 407-341-4313 to get started.