Weighing the Options of Refinancing

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It has been said that only in the case your new interest will be at least 2 points lower, should you refinance your loan. Maybe that was good advice a number of years ago, but as refinance costs have been getting lower, it may be a good time to look into it. A refinance is often worth its cost several times over, factoring in the advantages that come, as well as a reduced interest rate.


When you refinance, you might have the ability to reduce the interest rate and monthly payment , perhaps considerably. You may also have the ability to "cash out" some of your home equity, that you will be able use to consolidate debts, make home improvements, or finance a vacation. With lower interest rates, you may also be able to build your home equity faster by moving to a shorter-term loan.

Expenses and Fees

As you probably know, you'll have some fees and expenses during your process of refinancing. You'll be charged the same sort of fees as with your existing mortgage loan. These may include settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.

Do the Math

You might consider paying points to reduce your interest rate. If you pay (on average) 3% of the mortgage loan amount at the start, your savings for the term of the new loan can be substantial. Please talk to a tax professional before acting on rumors that the points paid can be deducted on your federal income taxes.

Another expense that a borrower might consider is that a lower rate of interest will lower the interest amount you'll deduct from your taxes. Call us at (207) 571-8034 to help you do the math.

All things considered, for most people the total of up-front costs to refinance are paid back soon in savings each month. We can help you explore what your options are, considering the effect a refinance could have on your taxes, if you are likely to sell your home in the next couple of years, and your money on hand. Call us at (207) 571-8034 to get started.

Want to know more about refinancing your home? Give us a call: (207) 571-8034.