When is Refinancing Worth it?

In the market for a mortgage loan? We can assist you! Call us at (207) 571-8034. Ready to begin? Apply Here.

Ever heard the pearl of wisdom that states you should only consider refinancing if your new interest rate is at least 2 points under your existing rate? Maybe that was good advice several years ago, but since refinance costs have been getting lower, it may be a good time to take a serious look. Refinancing has a number of benefits that will often make it worth the initial cost many times over.


When you refinance, you could have the ability to reduce the interest rate and monthly payment amount, sometimes considerably. You also could have the option of pulling out some of your home equity by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You could be able to refinance into a shorter-term mortgage loan, giving you the ability to add to your home equity faster.

Fees and Expenses

Of course, you will have to pay for your the refinance process. You'll be charged the same sort of fees as with your present mortgage loan. Included in the list may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math

You might look into paying points to reduce your interest rate. Your savings over the life of the mortgage loan may be substantial if you've paid up front about 3% of the new loan balance. We recommend that you consult with a tax professional before acting on rumors that the paid points can be deducted on your federal income taxes.

An additional cost that a borrower may take into account is that a lower interest rate will lower the interest amount you will be able to deduct from your federal income taxes. Call us at (207) 571-8034 to help you do the math.

Most borrowers find that the savings each month balance out the initial expenses of refinancing. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the near future, and your cash on hand. Call us at (207) 571-8034 to get you started.

Want to know more about refinancing? Call us: (207) 571-8034.