When rates fall steadily, refinancing may make sense even if you have done so once already. If you are able to shave off even half a percentage point you could be saving yourself hundreds of dollars in monthly payments. With interest rates slowly on the rise if you haven't refinanced your mortgage recently then now is the time to do it.
If you are considering a second refinancing, don't overlook this potential tax write-off: When you pay points to refinance, you must deduct the amount over the life of the loan, usually 30 years. But when you refinance a second time, all of the points that have not yet been deducted from the first refinancing can be written off in a lump sum. Say you refinanced to a 30-year mortgage five years ago and paid $3,000 in points. By now, you would have written off roughly $500. If you refinance again this year, you could deduct the remaining $2,500 on your tax return. For a homeowner in the 28% tax bracket, that works out to a savings of $700 -- enough to offset some or all of your costs this time around.
