Weighing the Options of Refinancing

Looking for mortgage advice? We'll be glad to discuss your mortgage needs! Give us a call today at (302) 765-8089. Want to get started? Apply Now.

Ever hear the pearl of wisdom that says you should only consider refinancing if the new interest rate is at least two points under your existing rate? Maybe several years ago that was good advice, but as refinance costs have been getting lower, it could be time to look into it. Refinancing has various advantages that often make it worth the initial expenditure several times over.


When you refinance, you might be able to reduce your interest rate and mortgage payment amount, sometimes significantly. Additionally, you might have the option of pulling out some of your home equity by "cashing out" some funds to renovate your home, consolidate debt, or take your family on a vacation. You could have the option to refinance to a shorter-term mortgage, enabling you to build up your equity faster.

The Cost

As you probably expect, you'll have some fees and expenses during your process of refinancing. You'll pay the same kinds of expenses and fees as with your existing home loan. Included in your costs will typically be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Doing the Math

You might offer to pay points (prepaid interest) to gain a lower interest rate. The money you'll save on the life of the loan may be substantial if you have paid up front about 3% of the new loan balance. We recommend that you consult a tax professional before acting on rumors that the points paid can be deducted on your taxes.

One more cost that borrowers might consider is that a reduced interest rate will lower the interest amount you will be able to deduct on your federal income taxes. We can help you do the math! Call us at (302) 765-8089.

All things considered, for most borrowers the total of initial costs to refinance will be paid back very quickly in savings each month. We will work with you to determine which program is perfect for you, taking into account your cash on hand, how likely you are to sell your residence in the near future, and how refinancing could effect your taxes. Call us at (302) 765-8089 to get started.

Curious about refinancing your home? Give us a call: (302) 765-8089.

Get a Refinance Quote

Looking to refinance your home? Fill out the following form to get a fast quote from us.

Contact Info
Property Information
Mortgage Information