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When to Refinance Your Mortgage

When to Refinance Your Mortgage

Is there a best time to do a home loan refinance? Maybe yes. Is it time for you to refinance? Do you need a lower payment of cash out? It could be you are looking to lower the monthly mortgage payment but also maybe get some cash out to make home improvements or other.

When considering a refinance, look at the cost vs the savings. If you are getting cash out, can you afford the new payment? We can calculate if refinancing is advantages to you. A refinanced loan can be worth its cost many times over, because of the advantages that it brings, as well as a lower interest rate.

Refinance Benefits

Getting a lower interest rate mortgage may be a great solution for you. When you refinance Mission Viejo loans, you may be able to lower the interest rate and mortgage payment , perhaps $200-300 per month. You also could have the option of pulling out some of the equity in your house by “cashing out” a sum of money to fix up your home, consolidate debt, or take your family on a vacation.

You may be able to refinance to a shorter-term mortgage loan, enabling you to build up your home equity faster. Consider a 15 year home loan but be prepared for a higher payment. We saw a home loan refinance Mission Viejo recently that only went up $200 per month but cut the term in half from 30 years to 15 years.

Loan Cost

Lenders can research various options to find you the lowest fees on a new mortgage. All these advantages do come with some expense, though. With your refinance, you’re paying for most of the same things you paid for during your existing mortgage loan. These might include settlement costs, an appraisal, lender’s title insurance, underwriting expenses, and others.

Add Up the Numbers

You might investigate paying points to receive a lower interest rate. If you pay (on average) three percent of the loan amount up front, the savings for the term of the refinanced mortgage can be great. You might have heard that the points may be tax deductible, but as tax regulations can be ever-changing, please consult with your tax professional before depending on this.

Another thing about taxes is that if you lower your interest rate, naturally you’ll also be reducing the interest amount that you can deduct on your taxes. This is another expense that borrowers take into consideration.

Most borrowers find that the monthly savings outweigh the up-front expenses of a refinance. We can help you figure out what your options are, considering the effect a refinance may have on your taxes, how likely you may be to sell in the next couple of years, and your cash on hand.

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