Is Refinancing Worth the Cost?

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Ever hear the pearl of wisdom that states you should only consider refinancing if your new interest rate is at least 2 points lower than your current one? That might have been accurate years ago, but with refinancing dropping in cost in recent years, it is never the wrong time to consider a new mortgage! A refinanced mortgage may be worth its cost many times over, considering the benefits that may come, as well as a reduced interest rate.


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

Expenses and Fees

Of course, you'll have some fees and expenses during your the refinance process. With your refinance, you are paying for many of the same things you were charged for during your existing mortgage loan. Among these will be settlement costs, an appraisal, lender's title insurance, underwriting fees, and others.

Do the Math

You might investigate paying points to get a better interest rate. If you pay (on average) three percent of the loan amount at the start, the savings for the term of the refinanced mortgage loan can be substantial. Please consult a tax professional before acting on advice that any paid points may be deducted on your federal income taxes.

Another thing about taxes is that once you reduce your interest rate, naturally you will also be lowering the paid interest amount that you'll be able to deduct on your federal income taxes. This is one more expense that borrowers take into consideration. We can help you do the math! Call us at 706-860-5514.

All things considered, for most borrowers the amount of up-front costs to refinance will be made up soon in savings each month. We can help you explore your options, considering the effect a refinance might have on your taxes, how likely you may be to sell in the next couple of years, and your money on hand. Call us at 706-860-5514 to get started.

Want to know more about refinancing your home? Give us a call: 706-860-5514.

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