Is Refinancing Worth the Cost?

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It has been said that only in the case your new interest will be at least two points under your current rate, should you refinance your mortgage. Maybe several years ago that was good advice, but since refinance costs have been getting lower, it may be a good time to take a serious look. A refinanced mortgage is often worth its cost several times over, factoring in the advantages that it brings, as well as a reduced interest rate.


You could be able to lower your interest rate (sometimes significantly) and reduce your monthly payment amount with your refinanced mortgage. Additionally, you might have the option of tapping into your home equity by "cashing out" some money to renovate your home, consolidate debt, or plan a special vacation. You may be able to refinance into a shorter-term mortgage program, giving you the ability to build your equity quicker.

Expenses and Fees

As you probably know, you will have some fees and expenses during the the refinance process. With your refinance, you're paying for most of the same things you were charged for during your existing mortgage loan. Included in your costs will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might think about paying points to get a reduced interest rate. The money you will save over the life of the mortgage may be significant if you've paid up front about three percent of the new loan total. We recommend that you consult a tax professional before acting on advice that the points paid can be deducted on your federal income taxes.

An additional expense that borrowers might consider is that a reduced interest rate will reduce the interest amount you'll be able to deduct on your federal income taxes. Call us at 866-840-8745 x2 to help you do the math.

In the end, for most borrowers the total of initial costs to refinance will be paid back very quickly in monthly savings. We can help you find out what your options are, considering the effect a refinance might have on your taxes, how likely you might be to sell in the near future, and your available cash. Call us at 866-840-8745 x2 to get you started.

Want to know more about refinancing? Give us a call: 866-840-8745 x2.

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