Weighing the Options of Refinancing
Ever heard the pearl of wisdom that says you should only refinance if your new interest rate is at least two points under your existing one? Maybe that was sound advice a number of years ago, but since refinance costs have been getting lower, it may be a good time to look into it. A refinanced mortgage can be worth its cost several times over, factoring in the benefits that can come, as well as a reduced interest rate.
Advantages
When you refinance, you may have the ability to reduce your interest rate and monthly payment , perhaps by a lot. Additionally, you may 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. With lower rates, you may also get the chance to build up home equity faster by moving to a shorter-term mortgage.
Fees and Expenses
As you probably expect, you'll have to pay for your process of refinancing. You will have to pay the same types of expenses and fees as with your current mortgage loan. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
Most borrowers find that the savings each month outweigh the initial expenses of a refinance. We will work with you to figure out what mortgage program is right for you, taking into account your cash on hand, how likely you are to sell your house in the near future, and how refinancing could effect your taxes. Call us to get you started.
