Is Refinancing Worth the Cost?

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It has been said that only when your new interest is at least 2 points below your current rate, should you refinance your mortgage. Maybe that was sound advice a number of years ago, but as refinance costs have been getting lower, it may be time to look into it. A refinanced mortgage can be worth its cost several times over, considering the benefits that it brings, in addition to a reduced interest rate.


You might be able to bring down your interest rate (sometimes substantially) and reduce your monthly mortgage payment amount with your refinanced loan. You might also have the ability to "cash out" some of the built-up equity in your residence, which you may use to consolidate debts, improve your home, or finance a vacation. With reduced interest rates, you might also get the chance to build your home equity faster by changing to a shorter-term loan.

Fees and Expenses

All these advantages do cost something, though. You will be charged the same types of fees as with your current mortgage loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might look into paying points to get a lower interest rate. The money you will save over the life of the loan might be significant if you have paid up front about three percent of the new loan balance. Please talk to a tax professional before acting on rumors that any points paid may be deducted on your federal income taxes.

An additional expense that a borrower might consider is that a reduced interest rate will reduce the interest amount you'll deduct on your taxes. We can help you do the math! Call us at (727) 478-2797.

Ultimately, for most borrowers the amount of initial costs to refinance are paid back soon in monthly savings. We can help you figure out what your options are, considering the effect a refinance might have on your taxes, how likely you may be to sell in the near future, and your money on hand. Call us at (727) 478-2797 to get you started.

Want to know more about refinancing your home? Give us a call: (727) 478-2797.

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