Ever hear the pearl of wisdom that states you should only refinance if your new interest rate will be at least two points under your present rate? That may have been valid a while back, but with refinancing dropping in cost recently, it’s never the wrong time to consider a new loan! A refinance can be worth its cost many times over, because of the advantages that it brings, as well as a reduced interest rate.

Curious about refinancing your home? Call California Capital Mortgage Company at (916) 456-1000 or email us by filling out the form below. It’s our job to answer lending questions, so we’re happy to help!

Benefits from Refinancing

When you refinance, you could have the ability to lower the interest rate and mortgage payment amount, sometimes significantly. You might also have the option to “cash out” a portion of the built-up equity in your residence, that you are able 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 loan, enabling you to build up your home equity quicker.

The Cost

As you probably know, you’ll have some fees and expenses during your process of refinancing. With your refinance, you are paying for basically the same things you were charged for when you got your current mortgage loan. Among these can be settlement costs, appraisal fees, lender’s title insurance, underwriting expenses, and so on.

Do the Math

You might look into paying points to reduce your interest rate. Your savings on the life of the mortgage could be substantial if you have paid up front about 3% of the new loan total. We recommend that you talk to a tax professional before acting on rumors that the paid points may be deducted on your federal income taxes.

An additional expense that a borrower might consider is that a reduced interest rate will lower the interest amount you’ll be able to deduct from your taxes. Call us at (916) 456-1000 to help you do the math.

Most borrowers find that the monthly savings quickly outweigh the initial cost of a refinance. We can help you find out your options, considering the effect a refinance may have on your taxes, how likely you might be to sell in the near future, and your cash on hand.