Mortgage Myth Busters: You need a good reason to refinance your texas mortgage? I have a few...

You need a good reason to refinance your texas mortgage? I have a few...

Have you heard the old adage in the mortgage business that states when its a good time to refinance your home? The magic number was two percent (2%). If you could lower your interest rate by at least 2% then its a good time to refinance your Texas mortgage.

 

While this may be a good 'general' rule of thumb, the truth is that there are MANY reason to refinance your Texas mortgage. I've taken the liberty to list a few for you, but please feel free to add a few of your own.

Lowering Your Mortgage Interest Rate - Alright, this was an easy one. Obviously, securing a lower interest rate is one of the top reasons for refinancing your current mortgage. Overall, this can make a big difference in your monthly 'out-of-pocket' costs and save you thousands of dollars in financing fees.

Build Faster Equity - If you are currently in a position where you can make higher monthly payments due to an increase in your salary or other good fortune, you may want to refinance your mortgage from a 30 year fixed rate Texas mortgage, to a lower rate and shorter term, like a 20 year or even a 15 year loan program. Lowering your term allows you to build your equity faster and can save you a tremendous amount of money on financing fees.

Change Your Loan Program (not just to a shorter term) - Some homeowners start out with an Adjustable Rate Mortgage (ARM) program which typically starts with a lower fixed rate mortgage and then adjusts after the first 3, 5, 7, or 10 years (depending on the program). The interest rate then adjusts every 6 months to one year, depending on the mortgage product, for the remainder of the loan term. While this is a fine product for some individuals, many homeowners make the switch to a fixed rate product for the stability of the rate and payment. When reviewing your mortgage options, be sure to very if you ask appropriate questions to understand the loan program.

Your Credit Score Has Improved - Perhaps you had a few blemishes in the past but have taken some time to improve your credit scores. You should not be stuck with a higher mortgage interest for the remainder of your loan term. Improving your FICO score from 70-100+ points can make a difference in your mortgage interest rate, and even your homeowners insurance. Not all Insurance Companies quote based on FICO scores. If your insurance company does, be sure to inform them of your improved scores. As for the mortgage rate itself, you can see an improvement between .500% and .750% (the range is based upon FICO score, Loan-to-Value ratio, and loan product).

Utilizing Your Equity - A cash-out refinance allows you to tap into the equity you have built up in your home. Many use this option to pay off revolving credit card accounts with 18%+ interest rates, or to send a child to college, or to use the money for home improvements (just to name a few).

 

Whatever your reason is for refinancing, just be sure to work with a mortgage professional that takes the time to understand YOUR needs. In addition, be sure to take the time to understand the mortgage product before agreeing to move forward.

 

Already in the process of refinancing or purchasing your home? Be sure to check out my tips on what to do and what not to do during the mortgage process.

 

*********************************************************

Are you looking to purchase a Texas home?  Perhaps you love your Texas home but would be interested in refinancing your Texas mortgage to a lower interest rate?  

I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice.  If you are available to talk, I am available to listen.  Give me a call or visit my website for more details.

Do you want to know all of your mortgage options? Call me today and let's discuss them further.

Texas Home Loan Consultant

Always available for your Texas Mortgage and Home Loan needs!

John R Cannata    P#214.728.0449

NMLS # 322646

Texas Home Loan Expert

Frisco TX Mortgage

      

 

The views expressed on this site are mine alone and do not reflect the views of my employer.

Comment balloon 11 commentsJohn Cannata • November 30 2010 08:35PM

Comments

John,

We are in the process now of refinancing and banks here are busy.

Wish there were more buyers out there now though!

Posted by Michele Miller ~ REALTORĀ®, LMC, HSE, CHS, SRES, CMRS, 'Helping You Make the Best Move" (ERA Key Realty~Worcester County Realty Group) almost 10 years ago

John, We refinanced back in I think the year 2000 to a 15 year loan which means we only have 6 years left to go which is WAY COOL!

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) almost 10 years ago

John - Excellent information and tips to refinance mortgage. Thank you for sharing a very good blog.

Posted by John Pusa, Your All Time Realtor With Exceptional Service (Berkshire Hathaway Home Services Crest) almost 10 years ago

Excellent blog John,  I like all the reasons you listed and would highly recommend you.

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, e-Pro, TAHS (CastNet Realty) almost 10 years ago

Great information.  If people are on the fence now, it is time to get off and refi.  Good luck on attracting that business!

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) almost 10 years ago

Michelle - As you know, this time of year is a little toughter to find buyers. So many are focused on the holiday. Hopefully things will pick up for you soon. Congrats on the refinance though. Its always nice to have a lower rate and/or term.

Marchel - We finally did that as well. We refinanced to a 15 year, last year. This year we did it again because I could get another 1.5% lower rate than what we had 14 months ago. Overall, the savings of moving from a 30 year term, to a 15 year term is saving us over $122K in financing. Its well worth it. I'll be very excited when we have less than 10 years left to pay.

Thank you John. Have a great day!

Thank you Ricki.Im available for your clients any day. :-)

Connie- Its a great time, as you know. Hopefully more people get off that fence before its too late and rates jump up (although even if they go up, they are still so appealing).

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) almost 10 years ago

Joan - I've never heard the 2% thing, but I've been tossing around refinancing and you gave plenty of good reasons why borrowers should.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) almost 10 years ago

Excellent list and recommendations John!

Posted by Karen Otto, Plano Home Staging, Dallas Home Staging, www.homes (Home Star Staging) almost 10 years ago

John  This is excellent information that anyone considering refinancing should read

Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) almost 10 years ago

Great post John. I refi'd a home at the end of 2009 and saved $200 a month, although the mortgage rates are lower now than when I refi'd, it's still nice to save that much money!!

Posted by Crystal Wolverton (Commerce Title Company) almost 10 years ago

Michelle - I hope you called about your refinance before the rates jumped up. They have been heading in the wrong direction for about 2 1/2 weeks now.

Thank you Karen O. and Karen K.

Crystal - $200 a month is a nice chunk of change on your mortgage.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) almost 10 years ago

Participate