Weighing the Options of Refinancing

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Ever heard the old rule of thumb that states you should only refinance if your new interest rate will be at least 2 points lower than your present rate? That might have been true a while back, but with refinancing dropping in cost in recent years, it's a good time to explore the options of a new mortgage loan! A refinance is often worth its cost several times over, factoring in the benefits that can come, in addition to a lower interest rate.

Benefits from Refinancing

You may 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 your equity, that you can use to consolidate debt, improve your home, or finance a vacation. With lower rates, you might also be able to build your home equity more quickly by moving to a shorter-term mortgage loan.

Expenses and Fees

All these benefits do come with some expense, though. You will have the same sort of expenses and fees as you did with your existing home loan. Included in the list will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

Paying points can get you a lower interest rate. Your savings on the life of the mortgage loan might be substantial if you have paid up front about three percent of the new loan balance. Please consult a tax professional before acting on advice that these paid points may be deducted on your federal income taxes.

One more expense that a borrower might consider is that a lower interest rate will reduce the interest amount you'll be able to deduct from your federal income taxes. Call us at 8776828787 to help you do the math.

Most people find that the savings each month outweigh the up-front expenses of refinancing. We can help you explore what your options are, 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 8776828787 to get you started.

Want to know more about refinancing? Give us a call: 8776828787.

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Taurus Mortgage Corporation

Est. 2011

333 City Boulevard West, 17th Floor
Orange, CA 92868