Weighing the Options of Refinancing

Some have said that only in the case your new interest is at least two points below your current rate, should you refinance your loan. That could have been true years ago, but with refinancing dropping in cost recently, it is a good time to think about a new mortgage! Refinancing your mortgage loan has a number of advantages that can make it worth the up-front cost many times over.
Benefits
You may be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with a refinanced loan. Additionally, you might be given the option of pulling out some of your home equity by "cashing out" some 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 loan, giving you the ability to add to your equity faster.
Fees and Expenses
All of these advantages do come with some expense, though. When you refinance, you're paying for most of the same things you paid for when you obtained your existing mortgage loan. Included in the list will probably be an appraisal, bankcard processor fees, underwriting fees, lender's title insurance, settlement costs, and other fees.
Do the Math
You could need to pay discount points (prepaid interest) to gain a lower rate of interest. If you pay (on average) three percent of the loan amount up front, the savings for the life of the new loan can be great. Please talk to a tax professional before acting on rumors that the paid points may be deducted on your federal income taxes.
An additional expense that borrowers might consider is that a lower interest rate will lower the interest amount you will deduct from your taxes. We can help you do the math! Call us at 702-796-3453 x3055.
In the end, for most the total of up-front costs to refinance are made up soon in monthly savings. We'll work with you to determine what mortgage program is right for you, looking at your cash on hand, how likely you are to sell your house in the next few years, and the effect refinancing might have on your taxes. Call us at 702-796-3453 x3055 to get started.