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Is Refinancing Worth the Cost?

Searching for a mortgage loan? Joe Wagner can help!                         Call Joe Wagner at 612-327-4544. Ready to begin? Apply Here.

Ever hear the old rule of thumb that states you should only refinance if the new interest rate will be at least 2 points below your present one? Perhaps several years ago that was sage advice, but as refinance costs have been getting lower, it could be a good time to take a serious look. Refinancing your mortgage loan has a number of benefits that often make it worth the up-front cost many times over.


When you refinance, you could be able to lower your interest rate and monthly mortgage payment amount, sometimes considerably. You might also have the option to "cash out" a portion of the built-up equity in your home, which you are able use to consolidate debt, make home improvements, or finance a vacation. With reduced rates, you might also get the chance to build your home equity more quickly by moving to a shorter-term loan.

Fees and Expenses

All these benefits do come with some expense, though. You will pay the same types of fees as you did with your current home loan. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and others.

Doing the Math

You might investigate paying points to reduce your interest rate. Your savings over the life of the loan might be substantial if you have paid up front about 3% of the new loan total. Please talk to a tax professional before acting on hear-say that the paid points can be deducted on your federal income taxes.

Another thing about taxes is that when you reduce your interest rate, naturally you'll also be reducing the interest amount that you will be able to deduct on your taxes. This is one more expense that some borrowers take into consideration. We can help you do the math! Call us at 612-327-4544.

Ultimately, for most borrowers the total of initial costs to refinance will be made up very quickly in savings each month. 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. Call us at 612-327-4544 to get you started.



Curious about Refinancing? Give Joe Wagner a call at 612-327-4544. It's his job to answer lending questions, so he is happy to help! We know you're busy, so feel free to complete the form below to be contacted by Joe Wagner.

Serving all of Minnesota.
Anoka MN, Apple Valley MN, Bemidji MN, Boundary Waters MN, Brainerd MN, Bloomington MN, Coon Rapids MN, Crow Wing County MN, Dakota County MN, Bloomington MN, Eden Prairie MN, Gull Lake MN, Hennepin County MN, Hopkins MN, Lakeville MN, Lake Mille Lacs MN, Lake Minnetonka MN, Lake Nokomis MN, Lake Pepin MN, Lake Vermilion MN, Lake Winnibigoshish MN, Leech Lake MN, Maplewood MN, Mendota Heights MN, Mound MN, Orono MN, Red Lake MN, Richfield MN, Rosemount MN, Savage MN, St Louis Park MN, White Bear Lake MN, Wright County MN.


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Today's Rates

Mtg Loan Rate APR
30-yr Fixed 3.89% 4.02%
15-yr Fixed 3.16% 3.33%
1-yr Adj 2.74% 3.4%
* national averages

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