Weighing the Options of Refinancing

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Ever hear the pearl of wisdom that states you should only consider refinancing if the new interest rate will be at least two points below your present one? That could have been valid years ago, but with the fact that refinancing has been costing less recently, it is a good time to think about a new mortgage loan! A refinanced mortgage loan is often worth its cost several times over, factoring in the benefits that come, as well as a lower interest rate.

Benefits

You could be able to bring down your interest rate (sometimes substantially) and reduce your monthly mortgage payment amount with your refinanced mortgage. Additionally, you may have the option of tapping into the equity in your property by "cashing out" a sum of money to renovate your home, consolidate debt, or plan a special vacation. You might be able to refinance to a shorter-term mortgage loan, giving you the ability to add to your home equity quicker.

Expenses and Fees

Of course, you will have some fees and expenses during your process of refinancing. With your refinance, you're paying for most of the same things you paid for during your original mortgage. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

Paying discount points can get you a better interest rate. Your savings on the life of the mortgage may be significant if you have paid up front about three percent of the new loan total. We recommend that you talk to a tax professional before acting on advice that any points paid may be deducted on your taxes.

Another cost that a borrower might take into account is that a reduced interest rate will lower the interest amount you will be able to deduct from your federal income taxes. Call us at 561-395-4264 to help you do the math.

All things considered, for most the total of up-front costs to refinance will be paid back very quickly in savings each month. We will help you find out which loan program is best for you, considering your cash on hand, how likely you are to sell your residence in the near future, and the effect refinancing will have on your taxes. Call us at 561-395-4264 to get you started.

Want to know more about refinancing? Call us at 561-395-4264.


Alternative Mortgage Group

80 SW 14 Ave
Boca Raton, FL 33486