When is Refinancing Worth it?

In the market for a new mortgage? We can assist you! Give us a call today at 561-395-4264. Ready to get started? Apply Now.

Ever heard the old rule of thumb that states you should only refinance if your new interest rate is at least 2 points lower than your existing one? That might have been accurate years ago, but with refinancing dropping in cost over the last few years, it is a good time to consider a new mortgage loan! A refinanced mortgage loan may be worth its cost several times over, because of the advantages that it brings, in addition to a reduced interest rate.


You may be able to lower your interest rate (sometimes by a lot) and make smaller monthly payments with a refinanced loan. You also might be given the option of tapping into your home equity by "cashing out" a sum of money to renovate your home, consolidate debt, or take your family on a vacation. You might have the option to refinance into a shorter-term mortgage, giving you the ability to build up your home equity faster.

The Cost

All these advantages do cost something, though. You will pay the same sort of fees as with your existing mortgage loan. Among these will be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.

Doing the Math

You could need to pay discount points (prepaid interest) to attain a better rate of interest. The amount you will save over the life of the mortgage may be significant if you've paid up front about three percent of the new loan total. Please talk to a tax professional before acting on advice that any paid points may be deducted on your taxes.

One more expense that borrowers might consider is that a lower rate of interest will reduce the interest amount you will deduct from your federal income taxes. Call us at 561-395-4264 to help you do the math.

Most borrowers find that the monthly savings balance out the initial expenses of a refinance. We'll help you figure out what loan program is best for you, taking into account your cash on hand, the likelihood of selling your home in the next few years, and what effect refinancing may have on your taxes. Call us at 561-395-4264 to get you started.

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

Alternative Mortgage Group

80 SW 14 Ave
Boca Raton, FL 33486