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Weighing the Options of Refinancing
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In the market for a mortgage? We can assist you! Call us at (926) 228-1944. Want to get started? Apply Online Now.
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Ever heard the pearl of wisdom that states you should only refinance if the new interest rate will be at least two points below your current one? That could have been true a while back, but with the fact that refinancing has been costing less recently, it is never the wrong time to explore the options of a new mortgage! Refinancing has a variety of advantages that often make it worth the initial cost several times over.
Benefits
When you refinance, you could have the ability to reduce your interest rate and monthly payment amount, perhaps significantly. You could also have the option to "cash out" some of your home equity, which you can use to take care of higher interest debt, make home improvements, or plan a vacation. You might be able to refinance into a shorter-term mortgage loan, enabling you to build up your equity faster.
The Cost
All these advantages do cost something, though. You'll have to pay the same types of expenses and fees as you did with your current mortgage loan. These might include settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.
Doing the Math
You could need to pay points (prepaid interest) to get a better rate of interest. If you pay (on average) three percent of the mortgage loan amount up front, the savings for the term of the new mortgage loan can be significant. You may be told that points can be tax deductible, but as tax regulations are ever-changing, please consult your tax professional before making any decisions based on this.
One more expense that a borrower may take into account is that a reduced interest rate will lower the interest amount you'll be able to deduct from your taxes. We can help you do the math! Call us at (926) 228-1944.
All things considered, for most people the amount of up-front costs to refinance are made up very quickly in savings each month. We'll work with you to figure out which loan program is right for you, taking into account your cash on hand, the likelihood of selling your house in the next few years, and how refinancing could effect your taxes. Call us at (926) 228-1944 to get started.
Curious about refinancing your home? Call us at (926) 228-1944.
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Today's Rates:
| 30-yr Fixed | 3.87% | 4% | | 15-yr Fixed | 3.14% | 3.31% | | 1-yr Adj | 2.76% | 3.42% |
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