When is Refinancing Worth it?

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It has been said that only in the case your new interest will be at least two points lower, should you refinance your mortgage. Maybe several years ago that was good advice, but as refinance costs have been getting lower, it may be a good time to look into it. A refinanced mortgage may be worth its cost many times over, because of the advantages that may come, along with a lower interest rate.


You might be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with a refinanced mortgage. You could also have the option to "cash out" some of the built-up equity in your home, which you can use to consolidate debt, make home improvements, or plan a vacation. You may be able to refinance to a shorter-term mortgage, giving you the ability to build up your home equity quicker.

Fees and Expenses

As you probably know, you'll have some fees and expenses during the the refinance process. When you refinance, you're paying for basically the same things you paid for when you got your existing mortgage. These may include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.

Do the Math

You might think about paying points to reduce your interest rate. If you pay (on average) three percent of the mortgage loan amount initially, the savings for the term of the new mortgage can be significant. You might be told that these points can be tax deductible, but because tax regulations can be ever-changing, we urge you to speak with a tax professional before depending on this.

Speaking of taxes, once your interest rate is lowered, of course you will also be lowering the interest amount that you'll be able to deduct from your federal income taxes. This is another cost that some borrowers take into consideration. We can help you do the math! Call us at 954.920.9799.

Ultimately, for most people the amount of initial costs to refinance are paid back soon in savings each month. We can help you find out your options, considering the effect a refinance might have on your taxes, whether you are likely to sell your home in the next couple of years, and your available cash. Call us at 954.920.9799 to get you started.

Want to know more about refinancing? Call us at 954.920.9799.

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