Is Refinancing Worth the Cost?
Shopping for a mortgage? We'd be thrilled to discuss our many mortgage solutions! Give us a call today at (860) 658-7100. Want to get started? Apply Now.
It has been said that only in the case your new interest is at least 2 points under your current rate, should you refinance your mortgage. That could have been sound advice a while back, but with the fact that refinancing has been costing less recently, it is a good time to explore the options of a new mortgage! A refinanced loan is often worth its cost many times over, because of the benefits that it brings, along with a lower interest rate.
When you refinance, you may have the ability to lower the interest rate and monthly payment amount, perhaps significantly. Additionally, you might have the option of tapping into your home equity by "cashing out" a sum of money to remodel your home, consolidate debt, or take your family on a vacation. You could be able to refinance into a shorter-term mortgage loan, enabling you to build up your home equity faster.
Fees and Expenses
Of course, you'll have some fees and expenses during your process of refinancing. With your refinance, you are paying for basically the same things you paid for during your existing mortgage. Among these can be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Doing the Math
Paying points can get you a lower interest rate. If you pay (on average) three percent of the mortgage loan amount initially, your savings for the life of the new loan can be substantial. We recommend that you consult with a tax professional before acting on rumors that these points paid may be deducted on your taxes.
Another cost that a borrower might consider is that a lower interest rate will reduce the interest amount you will be able to deduct from your federal income taxes. We can help you do the math! Call us at (860) 658-7100.
Most people find that the monthly savings outweigh the initial cost of refinancing. We can help you explore what your options are, 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 money on hand. Call us at (860) 658-7100 to get started.
Curious about refinancing your home? Give us a call at (860) 658-7100.