I receive this question quite often - Why Should I Refinance My Home? Whether you live in Texas or anywhere else, this is a valid question. Don't just rely on anyone answering this question, you should consult a professional. Refinancing your mortgage is a big step, but how do you decide when to do it? I like to give my clients some tips to help them decide when the time is right for them.
Its no secret. Everyone has been talking about the rates - "The rates are at an all time low." or "Rates are at historic lows". This is probably the first reason my clients decide to refinance. They hear it enough and want to know if refinancing would result in a lower monthly payments. Generally, if rates drop 1 percent or more - it's a good time to refinance. But lowering your rate is not the only reason to refinance your home.
Perhaps you were thinking about refinancing because you need extra money. College tuition or a high interest credit card? When refinancing to a lower rate and payment the money you save can be spent elsewhere.
One of the best reasons to refinance is because a client wants to reduce the term of their loan. Many of my clients refinance to save money over the life of their loan. For example, if you currently have a 30-year loan and you refinance to a 15-year loan, after you refinance you may have a higher monthly payment but you will pay off your loan quicker. I recently refinanced my home to a lower rate and shorter term. The payment is slightly higher, but I am saving over $122,000 in interest.
Do you have an Adjustable Rate Mortgage (ARM)? I strongly recommend refinancing if you have an ARM loan. Convert it to a fixed rate loan. Right now, fixed rate mortgages are lower than adjustable rates and a fixed rate mortgage leaves out the 'element of surprise' when the adjustment happens every 6 months to 1 year. If the rates are lower than they were when you got your loan, switching to a fixed rate mortgage can offer more security and stability as well as save you money!
The last reason some clients look to refinance is to consolidate debt. Loans such as second mortgages, credit lines, student loans and credit cards can often be consolidated when you refinance. In Texas, we do have regulations for completing a Texas Cashout. I'll be putting a post together for those as well. Watch for them on my outside blog www.FriscoTexasMortgage.com. Plus, consolidating your debt can result in tax savings, since consumer loans are not tax deductible, but a mortgage loan is tax deductible. For a better understanding, please consult a Tax Advisor.
Fortunately, rates are still low today, but no one knows how long they'll stay that way. If you've been thinking about refinancing your mortgage, give me a call today. I'll work with you to find a great rate so you can have more money in your pocket in 2009!
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Are you are looking to buy or sell a home in Frisco or another city in North Texas? Perhaps you love your home but would be interested in refinancing to a lower interest rate? If so, then I can help. I am a licensed Mortgage Consultant located in North Texas with over 15 years experience in the industry. I can help you get pre-approved for your new home loan in Texas 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 any time or visit my website for more details.
Always available for your Frisco Texas Mortgage needs!
John Cannata Reliant Mortgage p# 214.545.5604
Frisco Texas Mortgage Consultant
Copyright © 2009 by John Cannata (Reliant Mortgage Ltd) - Why Should I Refinance My Home in Texas? A common question, here's my thought
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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.
Always available for your Texas Mortgage and Home Loan needs!
John R Cannata P#214.728.0449
NMLS # 322646
The views expressed on this site are mine alone and do not reflect the views of my employer.
I do think all Texas homeowners should review their current interest rates, terms, etc. Refinancing is a good thing. I'm doing that myself, and hopefully soon!
It is definitely a great time to refinance for alot of folks. I tend to disagree slightly with that you shouldn't refi to consolidate debt...it can be a good thing and save alot of people money. I know that Texas does have different laws on that though. All the more reason to consult your local mortgage expert!
Loreena - I certainly hop that you received a great rate and you used a reliable broker. Congrats on taking advantage of the current rates.
Naoma - I dont disagree with consolidating debt. Why not get rid of high interest rate credit cards and consolidate to a lower rate mortgage? Plus, you get to write off the interest. Its a win win.
Well written. Many times, a refinance is not in the best interest of a home owner and they definitely need to talk with a professional about their options.
Donna - I do agree with that and have talked people out of it before. Some are insistent and its usually because they want to skip a payment or two and/or pay their taxes. Not great reasons, but if they did not budget correctly, I guess they can lower their interest and still pay their taxes.
Its usually those people that we HAVE to set up escrows for. Ultimately, they should see a benefit of the savings within a 4-5 year period. Anything longer than 5 years may not be a great idea. Like you said, consult someone to walk you through it to ensure its beneficial.
All very good points to consider for refinancing John, thanks for laying it out here in easy to understand terms.
Hi John, You have lots of good consumer information here.
Thank you Karen and Shirley. Appreciate you taking the time for my post.