As the year draws to a close, many Las Vegas and Henderson homeowners review their finances and look for ways to save. Refinancing your mortgage before January can help you lower monthly payments, reset your loan terms, and even boost your tax advantages for the coming year.
Waiting too long, however, can mean missing out on key opportunities. Refinancing after the new year may delay potential deductions and cause you to lose a chance to claim interest paid in the current tax year. Acting before December ends can help you close your loan faster and start the next year with a stronger financial footing.
In this guide, we’ll explore how year-end refinancing works, which tax benefits may apply, and how Drennen Home Loans helps homeowners complete the process smoothly before the January deadline.
Why Refinance Before the New Year
Refinancing before December 31 can offer benefits that go beyond lower monthly payments. The timing can make a real difference for both your taxes and your long-term savings.
- Capture final-year interest deductions. By closing your refinance before December, you may be able to deduct additional mortgage interest for this tax year. That deduction can lower your overall taxable income when filing.
- Lock in lower interest rates. If rates are expected to rise in the new year, refinancing now can secure a lower rate and help reduce total loan costs over time.
- Use home equity wisely. A cash-out refinance allows you to tap into your home’s equity for upgrades, repairs, or debt consolidation just in time for year-end planning.
- Simplify year-end finances. Refinancing can combine multiple loans into one payment, helping you start the new year organized and in control.
- Boost long-term savings. Even a small rate change can translate into thousands saved over the life of your mortgage.
Timing matters, especially when it comes to year-end financial goals. You can explore available programs on our Refinance Your Mortgage page to see which options fit your budget and goals before January.
How Refinancing Affects Taxes
Refinancing can impact your taxes in several ways, depending on the type of loan and how you use the funds. Understanding these factors helps you plan more effectively for your next filing season.
Mortgage Interest Deductions
When you refinance, the mortgage interest you pay on a qualified home loan may still be deductible. If you close your refinance before December 31, that interest can be included in this year’s tax return. This benefit can reduce your taxable income and help lower the amount you owe. Always review your 1098 form from the lender for accurate totals.
Points and Fees
Some homeowners pay points or fees during refinancing to lower their interest rate. These points are often tax-deductible but may need to be spread out over the life of your loan. Keeping track of what you paid at closing makes filing simpler and ensures you get credit for every deduction you qualify for.
Cash-Out Refinancing Rules
If you take cash out during your refinance, how you use that money matters for taxes. When the funds are used for home improvements—like remodeling a kitchen or replacing a roof—the interest on that portion may remain deductible. However, using cash for personal expenses does not qualify for deductions.
While tax rules vary, refinancing before January often provides more flexibility when filing. It allows you to take advantage of current deductions before the year closes. For personalized guidance, consult a tax professional. Drennen Home Loans can help you understand which parts of your refinance may bring year-end advantages.
Steps to Start a Year-End Refinance
Getting a refinance completed before the year ends takes preparation, but it’s easier than most homeowners think. With the right steps, you can move from application to closing in time to enjoy the benefits.
Review Your Current Loan
Start by checking your current mortgage statement. Note your balance, interest rate, and remaining term. Knowing where you stand helps you see potential savings. A quick consultation with Drennen’s Mortgage Team can help you calculate how much a refinance could reduce your payments or total interest.
Check Your Credit and Equity
Lenders look closely at your credit score and home equity when evaluating refinance applications. A higher credit score can mean better rates, and more equity can open the door to cash-out options. Review your credit report for errors and use recent home value data to estimate your current equity before applying.
Submit Your Refinance Application
Once you’re ready, complete your refinance application with accurate financial information. Provide pay stubs, W-2s, tax returns, and your most recent mortgage statement. Since year-end volume is lower, lenders can often process applications faster in December. That timing can help you close before the new year.
Preparation and quick action are key to a successful refinance before January. Start the process early using our Apply for a Mortgage form and let our team guide you every step of the way.
Common Refinance Mistakes to Avoid
Even small mistakes can delay your refinance or reduce your savings. Avoiding these errors helps ensure your loan closes smoothly before January.
- Waiting too long to start. Year-end refinances move quickly, but processing still takes time. Starting early gives lenders time to review and close before the deadline.
- Ignoring closing costs. Review fees carefully. While refinancing often saves money long term, make sure the costs make sense for your budget and goals.
- Changing jobs or credit activity. Keep income stable and avoid opening new credit accounts until after closing. Sudden financial changes can delay approval.
- Skipping rate comparison. Compare both fixed-rate and adjustable-rate options. A small difference in rate can save thousands over the life of your loan.
- Missing document deadlines. Respond quickly when your lender requests paperwork. Missing documents are one of the most common reasons closings get delayed.
Avoiding these mistakes helps you lock in savings and finish your refinance on schedule. Read how other homeowners successfully refinanced in our Client Testimonials section for real local success stories.
Ready to Refinance Before the New Year?
Refinancing before January can bring powerful financial benefits. From locking in lower rates to maximizing deductible interest, the timing can make a lasting difference. Drennen Home Loans helps homeowners across Las Vegas and Henderson refinance with confidence through fast approvals, clear communication, and expert local guidance.
📞 Want to maximize your year-end savings?
Visit our Contact a Loan Officer page let’s complete your refinance before the year ends 🏡
