Is Refinancing Worth the Cost?

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Some have said that only in the case your new interest will be at least 2 points below your current rate, should you refinance your loan. Maybe several years ago that was sage advice, but since refinance costs have been falling recently, it could be a good time to look into it. A refinanced mortgage loan is often worth its cost many times over, factoring in the benefits that come, as well as a reduced interest rate.


You might be able to bring down your interest rate (sometimes significantly) and reduce your monthly payment amount with your refinanced mortgage loan. You also might have the option of pulling out some of the equity in your house by "cashing out" some money to renovate your home, consolidate debt, or plan a special vacation. With lower interest rates, you might also be able to build up home equity more quickly by moving to a shorter term loan.

Fees and Expenses

Of course, you'll have to pay for your the refinance process. You'll have the same sort of fees as with your existing home loan. Included in your costs might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

You might look into paying points to reduce your interest rate. The money you will save on the life of the mortgage loan could be substantial if you have paid up front about 3% of the new loan total. You may hear that the points may be tax deductible, but as tax regulations are ever-changing, we urge you to consult a tax professional before depending on this.

Speaking of taxes, when you lower your interest rate, of course you will also be lowering the interest amount that you may deduct from your federal income taxes. This is another cost that borrowers take into account. We can help you do the math! Call us at 719-425-2226.

In the end, for most borrowers the total of up-front costs to refinance will be paid back soon in monthly savings. We'll help you determine which mortgage program is right for you, considering your cash on hand, the likelihood of selling your home in the near future, and how refinancing could effect your taxes. Call us at 719-425-2226 to get started.

Want to know more about refinancing your home? Give us a call at 719-425-2226.

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