When is Refinancing Worth it?

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It has been said that only if your new interest is at least 2 points under your current rate, should you refinance your mortgage. Maybe several years ago that was wise advice, but since refinance costs have been getting lower, it could be a good time to take a serious look. A refinanced mortgage is often worth its cost several times over, factoring in the benefits that it brings, as well as a lower interest rate.


You may be able to bring down your interest rate (sometimes substantially) and reduce your mortgage payment amount with a refinanced mortgage loan. Additionally, you might be given the option of tapping into your home equity by "cashing out" some money to renovate your home, consolidate debt, or take your family on a vacation. You could have the option to refinance to a shorter-term mortgage program, giving you the ability to add to your home equity quicker.

The Cost

All these advantages do come with some expense, though. When you refinance, you're paying for basically the same things you paid for when you got your current mortgage loan. These might include settlement costs, an appraisal, lender's title insurance, underwriting fees, and so on.

Doing the Math

You might offer to pay discount points (prepaid interest) to get a better rate of interest. If you pay (on average) 3% of the loan amount initially, your savings for the life of the new mortgage loan can be significant. Please consult a tax professional before acting on rumors that these paid points can be deducted on your federal income taxes.

An additional expense that borrowers might take into account is that a lower interest rate will lower the interest amount you will deduct on your taxes. Call us at 6038936616 to help you do the math.

Most people find that the monthly savings outweigh the initial cost of a refinance. We'll help you determine which mortgage program is the ideal fit for you, looking at your cash on hand, how likely you are to sell your house in the near future, and how refinancing might effect your taxes. Call us at 6038936616 to get you started.

Curious about refinancing your home? Call us: 6038936616.

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Omni Mortgage Company, Inc.
NMLS#: 1954

Michael Loffredo NMLS 12192

224 Main Street Suite 1A
Salem, NH 03079-3187