Who Should Refinance

Learn if mortgage refinancing is right for you. Consider these issues before you take advantage of Sacramento mortgage refinance.

• When you plan to move. If you plan to move within the next three to five years, Sacramento mortgage refinance might end up costing you more than it saves you. Usually, the longer you plan to stay in your home, the more savings you will realize from Sacramento mortgage refinance.
• Your current mortgage's early-discharge penalties. Most mortgages have early-discharge, or prepayment, penalties. How much of a penalty you'll pay varies by lender, but it is usually a percentage of your outstanding balance or a few months of interest payments.
• How much your new mortgage will cost. Sacramento mortgage refinance usually entails several fees that might include appraisal, application, origination, insurance, title search, and legal costs. These fees can add up to thousands quickly, which is worth it if your new mortgage interest rate is at least 0.5% lower than that of your current mortgage.
• The difference between the true costs of borrowing. Remember that interest rates are not the best way to gauge the true cost of borrowing. Interest rates don't account for charges, fees, and interest payments over the life of the loan. What you pay for your refinanced mortgage will depend on the type of mortgage you have (adjustable or fixed), how long the term is, what discount points you paid, and any costs you must pay up-front. The best way to compare a new mortgage with your current mortgage is the annual percentage rate (APR) of the loans. This number represents the true cost of borrowing, and, by law, all lenders must compute it the same way.
• Fewer tax breaks. Most homeowners deduct mortgage interest on their income taxes, which can add up to substantial savings. If you use Sacramento mortgage refinance to switch to a lower interest rate, you won't be able to deduct as much interest expense on your taxes. You will probably still save money, but your refinancing savings might not be as large as you'd hoped. Before you apply for Sacramento mortgage refinance, consult with your accountant or tax advisor to discuss the impact of refinancing on your tax savings.

If you have any questions, please check out our Frequently Asked Questions page.