Ever heard the old rule of thumb, you should only refinance if your new interest rate is at least two points lower? That may have been true years ago, but with refinancing dropping in cost over the last few years, it's never the wrong time to think about a new loan! Refinancing has a number of benefits that often make it worth the up-front expenditure many times over.

When you refinance, you might be able to lower your interest rate and monthly payment -- sometimes significantly. You might also be able to "cash out" some of the built-up equity in your home, which you can use to consolidate debt, improve your home, and take a vacation -- whatever! With lower rates and balances, you might also be able to build up home equity faster with a shorter-term new mortgage.

All these benefits do cost something, though. When you refinance, you're paying for most of the same things you paid for when you obtained your original mortgage. These might include settlement costs and other fees, an appraisal, lender's title insurance, underwriting fees, and so on.

You might have to pay a penalty if you refinance your previous mortgage too quickly. That depends on the terms of your existing mortgage. These penalties are illegal in some states. More often than not, the penalties apply only for the first year or two. We'll help you figure it out.

You might pay points to get a more favorable interest rate. If you pay (on average) three percent of the loan amount up front, your savings for the life of the new mortgage can be significant. You should be aware that the IRS has recently said that points paid for the purpose of refinancing your mortgage cannot be deducted in their entirety in the year you pay them, unless the refinanced loan is primarily for home improvements. Consult your tax professional before deducting points you pay on your new mortgage from your federal income taxes.

Speaking of taxes, if you lower your interest rate, naturally you will be lowering the amount of mortgage interest payments you can deduct from your federal income taxes. This is another cost that some borrowers consider. We can help you do the math!

Ultimately, for most people the amount of up-front costs to refinance are made up very quickly in monthly savings. We'll work with you to determine what program is best for you, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your taxes.

When you let us help you find the loan that's right for you, you truly are taking advantage of the best technology and expertise. We’ll get you a loan decision and funding on your loan quickly!

Doris Bitonio
AmeriFunding Express
(808) 864-8467

Five Ways
to Speed Up
the Loan Process:

1. Have everything ready and in one place

2. Be honest and complete when you fill out your application.

3. Respond promptly to requests for additional information.

4. Be prepared to explain derogatory items in your credit report.

5. Let the appraiser in!

AmeriFunding Express can answer your questions about the entire mortgage process. The best way we can help you is by getting you pre-qualified for a mortgage loan. To get started, simply go to www.afeloans.com and complete the form. You can also call 808-447-9173 (Hawaii) or 702-953-2240 (Nevada). We look forward to hearing from you.