When is Refinancing Worth it?

In the market for a new mortgage loan? We will be glad to assist you! Give us a call today at 305-967-7200. Want to get started? Apply Here.

Ever hear the old rule of thumb that says you should only refinance if the new interest rate will be at least two points under your present one? That could have been true a while back, but with refinancing dropping in cost recently, it's a good time to consider a new mortgage! A refinanced mortgage is often worth its cost several times over, considering the advantages that it brings, in addition to a reduced interest rate.


You might be able to lower your interest rate (sometimes significantly) and reduce your monthly mortgage payment amount with a refinanced mortgage loan. You could also have the option to "cash out" some of your equity, that you may use to take care of higher interest debts, add on to your home, or plan a vacation. You could be able to refinance into a shorter-term mortgage program, giving you the ability to add to your home equity faster.

Fees and Expenses

All of these benefits do cost something, though. With your refinance, you are paying for most of the same things you were charged for when you obtained your existing mortgage. These probably include settlement costs, appraisal fees, lender's title insurance, underwriting fees, and others.

Do the Math

You might investigate paying points to reduce your interest rate. Your savings on the life of the loan may be substantial if you've paid up front about 3% of the new loan total. Please consult a tax professional before acting on advice that any paid points may be deducted on your federal income taxes.

Another expense that borrowers may consider is that a lower interest rate will reduce the interest amount you'll be able to deduct on your federal income taxes. Call us at 305-967-7200 to help you do the math.

Most people find that the savings each month quickly outweigh the up-front cost of refinancing. We'll work with you to determine what loan program is best for you, looking at your cash on hand, how likely you are to sell your home in the next few years, and the effect refinancing may have on your taxes. Call us at 305-967-7200 to get started.

Curious about refinancing? Call us at 305-967-7200.

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