You may decide to refinance to accomplish a variety of goals, but for some basic reasons: To save money by getting a lower interest rate or to save money by using a tax-deductible loan (the refinance) to pay off non-tax-deductible debt.
People most commonly use a refinance loan to:
- Convert a higher interest rate mortgage to a lower interest rate mortgage
- Lower their cost of debt by converting non-tax-deductible debt, such as credit cards or car loans, to tax-deductible mortgage debt.
- Convert an adjustable rate mortgage to a fixed rate.
- Consolidate a first and second mortgage into one lower-rate mortgage.
- To get cash for family needs/expenses (tuition, medical expenses, etc.)
- To reduce the term of their mortgage.
The key point to remember in all these instances is a refinanced mortgage offers you tax-deductible borrowing (consult with a tax professional). Is a refinance a smart move for you? To find out, contact us today. You’ll get an honest opinion on what’s most advantageous for you.