Is Refinancing Worth the Cost?
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Searching for a mortgage loan? We'd be thrilled to talk about our many mortgage solutions! Call us at (808) 935-0678. Want to get started? Apply Now.
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Some have said that only in the case your new interest is at least 2 points lower, should you refinance your mortgage. That could have been sound advice a while back, but with refinancing dropping in cost recently, it's never the wrong time to explore the options of a new loan! Refinancing your mortgage loan has a variety of benefits that will often make it worth the up-front expenditure many times over.
Benefits
You may be able to lower your interest rate (sometimes by a lot) and reduce your monthly payment amount with your refinanced mortgage loan. You could also have the option to "cash out" a portion of your equity, which you are able use to take care of higher interest debt, add on to your home, or finance a vacation. You might have the option to refinance to a shorter-term mortgage loan, giving you the ability to build up your equity quicker.
The Cost
All these benefits do cost something, though. When you refinance, you are paying for most of the same things you were charged for during your current mortgage. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.
Do the Math
You might consider paying points to reduce your interest rate. When you pay (on average) 3% of the mortgage loan amount initially, your savings for the term of the refinanced mortgage can be great. You might hear that these points can be tax deductible, but because tax regulations can be difficult to keep up with, please consult a tax professional before considering this in your calculations.
Another thing about taxes is that when you bring down your interest rate, of course you will also be reducing the interest amount that you'll be able to deduct on your taxes. This is another expense that some borrowers take into account. We can help you do the math! Call us at (808) 935-0678.
Most people find that the monthly savings quickly outweigh the up-front expenses of a refinance. We will work with you to figure out which mortgage loan program is perfect for you, looking at your cash on hand, how likely you are to sell your house in the next few years, and how refinancing can effect your taxes. Call us at (808) 935-0678 to get started.
Curious about refinancing? Give us a call: (808) 935-0678.