Weighing the Options of Refinancing

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It has been said that only if your new interest is at least two points under your current rate, should you refinance your mortgage. 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 consider a new mortgage loan! A refinanced mortgage can be worth its cost several times over, considering the benefits that can come, as well as a reduced interest rate.

Advantages of Refinancing

When you refinance, you could have the ability to reduce the interest rate and mortgage payment amount, sometimes significantly. You might also be able to "cash out" a portion of the built-up equity in your residence, that you may use to take care of higher interest debts, improve your home, or plan a vacation. You may have the option to refinance into a shorter-term mortgage loan, enabling you to build up your equity faster.

The Cost

As you probably expect, you'll have to pay for the the refinance process. With your refinance, you are paying for basically the same things you paid for during your current mortgage. Included in the list will probably be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

You could offer to pay points (prepaid interest) to get a better rate of interest. If you pay (on average) three percent of the loan amount initially, the savings for the life of the refinanced mortgage can be great. You may be told that points can be tax deductible, but because tax regulations can be ever-changing, we urge you to consult with a tax professional before making any decisions based on this.

Speaking of taxes, if your interest rate is reduced, it follows that you will also be lowering the paid interest amount that you'll be able to deduct from your taxes. This is one more expense that some borrowers take into consideration. We can help you do the math! Call us at 918-748-4470/877-748-4470.

In the end, for most borrowers the total of initial costs to refinance will be made up very quickly in monthly savings. We can help you find out what your options are, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the near future, and your available cash. Call us at 918-748-4470/877-748-4470 to get you started.

Curious about refinancing? Call us at 918-748-4470/877-748-4470.

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