Advantages of Refinancing

You might be able to bring down your interest rate (sometimes by a lot) and reduce your monthly payment amount with a refinanced mortgage loan. You may also have the ability to "cash out" some of your home equity, which you can use to take care of higher interest debt, make home improvements, or take a vacation. You might be able to refinance to a shorter-term mortgage program, enabling you to build your equity faster.

The Cost

Of course, you'll have to pay for the process of refinancing. When you refinance, you're paying for basically the same things you were charged for when you obtained your existing mortgage. Included in your costs may be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

Paying discount points can get you a better interest rate. Your savings on the life of the loan might be significant if you have paid up front about 3% of the new loan total. You may hear that the points may be deducted on your income taxes, but as tax regulations are ever-changing, please consult a tax professional before making any decisions based on this.

Speaking of taxes, if your interest rate is reduced, it follows that you'll also be lowering the interest amount that you will be able to deduct from your taxes. This is one more cost that borrowers take into account. Call us at (334) 285-8850 to help you do the math.

All things considered, for most people the amount of up-front costs to refinance will be made up soon in savings each month. We'll work with you to find out what loan program is ideal for you, taking into account your cash on hand, how likely you are to sell your residence in the next few years, and the effect refinancing could have on your taxes. Call us at (334) 285-8850 to get you started.

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