Are you trying to decide whether a Portland Refinance is what you want and need right now? You're not alone.
It can be confusing to think about whether a lower monthly payment is really beneficial as compared to what it will cost you to refinance your mortgage. In the last few years, mortgage lenders have introduced all sorts of incentive programs to get people to buy homes and / or refinance their mortgages. There are some programs that lower or completely eliminate the homeowner's out-of-pocket expenses of refinancing. When looking for a Portland Refinance, be sure to ask lenders how much they can save you on your "points" or what it will cost you to refinance.
The fees associated with refinancing your home can add up quickly, and can be confusing for the average homeowner. Fee reductions from lenders can save a homeowner a lot of money, but may result in a slightly higher interest rate on the refinancing loan. Also, if a homeowner expects to live in his home for at least three to five years, many mortgage lenders will allow the homeowner to pay "points" and closing costs upfront. It may be worth it to the homeowner to pay what may amount to a couple of thousand dollars on points, but at the same time receive a lower interest rate that will result in a lower monthly mortgage payment. With this scenario, the homeowner will recoup their cost of points within a year or so and will begin saving actual cash from that point on. When talking to a lender about your Portland Refinance, you will need to decide which interest rate works best for you. There is usually a range of interest rates that is dependent on different amounts of points. A point is equal to one percent of the loan. Have the lender help you analyze what will save you money.
The costs of refinancing are similar to those when you got an original home loan and can include legal fees, application fees, settlement costs, and other related fees. When refinancing, additional fees will arise and they can include a fee charged if you paid off your original mortgage early, the points associated with the refinance, and the home loan interest rate. Typically the cost runs between three and six percent of the total amount of the loan.
Mortgage brokers know about the laws governing taxes related to mortgages. Many homeowners find the tax issues related to the home loan refinance process confusing, but your mortgage broker will guide you through the process. To make a long story short, the Internal Revenue Service (IRS) has ruled that interest paid for refinancing must be deducted over the life of the loan. However, if the home loan is being used to make improvements to your house, the borrowers may be permitted to deduct a portion of the interest right away. The exact tax laws relating refinancing are complex and the details should be discussed with your mortgage broker. The IRS website, http://www.irs.gov may also be helpful when gathering general information on the subject of taxes and refinancing.