Should I Refinance My Home?Refinance Programs We Offer Obama Plus Program Every year millions of homeowners refinance their home mortgages. This process and the costs involved should be fully understood before undertaking this type of transaction. So, Should I or Shouldn't I? Some of the reasons to consider refinancing your home mortgage include: You should carefully consider the following things before you make a final decision to refinance your home mortgage: How much does it cost to refinance? What are the overall benefits? The old rule of thumb stated that you should only refinance if your new interest rate is at least two points lower than your current interest rate. Nowadays, however, with the costs of refinancing dropping over the last few years, it's always a good time to think about refinancing to a new loan. There are many benefits to refinancing that make the upfront closing cost expenditure very worthwhile. When you refinance, however, you have to pay for many of the same items that you paid for when you obtained your original mortgage. These costs will probably include settlement fees, appraisal fees, title insurance costs, loan origination fees, underwriting fees, and other closing costs. Also, depending on the specifics of your original mortgage, you may incur a prepayment penalty if you refinance too soon. In most cases, prepayment penalties only apply for the first few years of the mortgage, and are even illegal in certain areas. You can also choose a low closing cost option where the rate is higher but the costs are extremely low. We can help you choose the best option for you!!!!! Furthermore, it may benefit you to pay points on your new loan in order to obtain a better interest rate. By paying a small amount upfront, you may save a significant amount of money over the life of the new mortgage. It should be noted, however, that the IRS has indicated that points paid for the purpose of refinancing your home mortgage cannot be deducted entirely in the year you pay them, but must be spread over the life of the loan. Please consult with your tax advisor to ensure that you handle this properly on your income tax returns. Also concerning income taxes, by lowering your interest rate on your home mortgage, you will also be lowering the amount of mortgage interest payments you can deduct on your income tax returns. Although this is another cost some borrowers consider, it generally does not make good financial sense to continue paying a high interest rate on your mortgage simply to get a better deduction on your income tax returns. Again, please consult with your tax advisor for specific advice related to your specific tax situation. All in all, for most people, the upfront costs of this type of transaction are made up very quickly in monthly savings. The mortgage professionals at Cronin Financial Services, LLC will work closely with you to determine which program is best for you and your current financial situation. Please don't hesitate to contact us for a free mortgage evaluation and additional details about how we may be able to help you with your home mortgage and refinancing needs.
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