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When to Refinance

Why consider refinancing?

Your home may be your most valuable financial asset.

If you haven’t refinanced recently, you’re probably paying a higher interest rate on your mortgage than you should. Take advantage of today’s record-low mortgage rates while they last. Rates areSmall House and Piggy Bank with Stacks of Hundred Dollar Bills Isolated on a White Background. expected to remain low for a while, but they should gradually increase. When they do, many borrowers will regret having missed the opportunity to grab the lowest mortgage rate in history.

When you refinance, you pay off your existing mortgage and create a new one. You may even decide to combine both a primary mortgage and a second mortgage into a new loan.

Choosing the right refinancing option for your mortgage may be the most important financial decision you will make today. Below are some insights on helping you make the right decision towards refinancing.

The Advantages of Refinancing

You may be able to lower your interest rate (sometimes by a lot) and have smaller monthly payments with a refinanced mortgage. Additionally, you might have the option of tapping into your home equity by “cashing out” a sum of money to fix up your home, consolidate debt, or take your family on a vacation. You may be able to refinance to a shorter-term mortgage, enabling you to add to your equity faster.

The Cost

Of course, you will have some fees and expenses during your process of refinancing. You will be charged the same sort of expenses and fees as you did with your existing home loan. Included in your costs may be an appraisal, underwriting fees, lender’s title insurance, settlement costs, and other fees.

Do the Math

You could offer to pay discount points (prepaid interest) to get a more favorable rate of interest. The amount you will save over the life of the mortgage loan could be substantial if you have paid up front about 3% of the new loan balance. You might have heard that the points can be deducted on your income taxes, but as tax regulations are ever-changing. We urge you to consult your tax professional before making decisions based on this.

An additional expense that a borrower may take into account is that a lower rate of interest will lower the interest amount you’ll be able to deduct on your federal income taxes.  We can help you do the math to show you the benefits of your refinance options.

Ultimately, for most people the total of initial costs to refinance are made up soon in monthly savings.

The team at Premiere Financial has years of experience in lending. Our goal is to help you make your refinancing process smooth, easy, headache and hassle free. 

We work with you each step of the way to find out what program is perfect for you, taking into account your cash on hand, the likelihood of selling your home in the next few years, and the effect refinancing might have on your taxes.

Contact us today at 760-930-0325 to discover the refinancing options available to you.

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