Refinancing Your Tucson Home
Refinancing Your Tucson Home? A frequently quoted but just as frequently incorrect statement says that if your loan is less than two years old, you shouldn’t refinance now.
This is not an entirely accurate assumption. Your decision to refinance a home in Tucson should be based on whether you will own the property long enough to recapture the expenses connected with creating the new loan.
Do the Math like this: Subtract the proposed new loan payment from your existing payment to find out what your monthly savings will be. Then, just divide the monthly savings into the cost of the refinancing. The result will tell you the number of months it will take to break even.
If you are planning to stay in your home at least that long, then, in most cases, you should refinance. One exception would be if existing mortgage is in the last few years of its life, it could be amortizing very fast. Usually, this will not occur unless you are in the last quarter of the loan life.
When you refinance a home, the points paid to acquire the loan, as well as any loan origination fees, cannot be fully written off as interest in the year paid. Those costs must be spread over the life of the mortgage. (you will get to deduct these costs eventually, when you sell the home).
For that reason, you will probably be better off in getting a “par value” loan which means there will be few or no points charged. Even though the rate will be higher, the interest is fully deductible as long as the federal limits are not exceeded, and you can keep the cash in your account to earn interest.
If you are having any difficulty in making a decision, please call me. I would be happy to refer you to some local Tucson Mortgage Lenders who are Experts at refinancing homes in Tucson and can answer all your questions.