Should Homeowners in Texas Refinance Their Mortgage

Should Homeowners in Texas Refinance Their Mortgage
Choosing to refinance your mortgage can be a very challenging task While the prospect of a lower rate, lower monthly payment, or pulling equity out of your home to use for other purposes may sound attractive, there are a number of factors a homeowner should consider when deciding whether the time is right . .The following are five factors to consider when making this decision . .1 Low Interest Rates The most obvious factor in whether to refinance is interest rates Fortunately, mortgage rates in Texas tend to be lower than in other parts of the country due to the perceived lower risk of our housing market If mortgage rates have decreased since your last loan was originated, or if fixed rates are relatively low and you are currently in an adjustable rate mortgage, refinancing might make sense In the case of a conversion from an adjustable rate loan to a fixed rate loan, your interest rate savings may not need to be that significant if your primary objective is to remove the risk of rising interest rates from your future budget In a low rate environment, you might have the opportunity to lower your monthly payment while keeping the term of your mortgage approximately the same You may also consider refinancing the term of your mortgage to keep your payment consistent, but allowing yourself to pay off the loan sooner With any of these options, your interest savings along over the term of your mortgage loan can easily amount to thousands of dollars . .2 Increased Equity in Your Home Unlike many areas of the country, many residents of Texas, and specifically South Texas communities like Spring, Tomball, The Woodlands, and Houston have experienced increases in the value of their home since it was purchased due to the strong local economy which continued to thrive during the energy crisis of 2007-08 Furthermore, home affordability in Texas remains high relative to the rest of the U S , meaning there will likely be a more ready source of buyers than in markets like Las Vegas or Southern California Unfortunately, unlike your brokerage account, you cannot easily access this equity unless you sell your home An alternative would be to pursue a cashout refinance where you would refinance for a higher amount than your current loan balance Since the interest rate on a first mortgage is likely lower than on credit card or other unsecured debt, and likely tax deductible, paying off other debt in a cash out refinance can make good financial sense Keep in mind there are specific laws in Texas limiting cash-out refinances to 80% of a home’s value, so your ability to pursue this strategy will be limited by the amount of equity in your home In cases where you either increase the term of your loan or interest rates have fallen, this strategy may allow your monthly payment to remain the same, though you need to remember that financing additional principal inevitably means you will increase your overall mortgage debt There’s no free lunch! . .3 You Are Still in the Early Years of Your Mortgage Loan In the early years of your payment schedule, most of your payment is going towards principal; great for a tax deduction, but not so great for paying off your loan anytime soon! However, this is when it makes the most sense to refinance When you are in the later stages of your loan, most of your payment goes towards principal, thus minimizing the impact of a reduced interest rate Typically, if you are just seeking to reduce the rate on your loan, you will likely fare best if you refinance in the first ten years of a 30 year mortgage Alternatively, if you are considering taking cash out of your home when your first mortgage balance is low, you may be better off taking out a home equity line of credit or a second mortgage As we stated earlier, your ability to take cash-out in a refinance may be limited due to state law . .4 You Plan to Remain in Your House In order to maximize the value of refinancing, you need to remain in your home long enough for your interest savings to offset your closing costs For example, if refinancing your mortgage will cost $3,000, and your monthly payment will be reduced by $200, you need only remain in your house for 15 months to break even On the other hand, if your payment is only going down $75 per month, it will take you 40 months While we all think we’ll never move, evidence suggests we will The average homeowner moves approximately every seven years, so you should keep this in mind when making your decision . .5 You Have a Large Mortgage Balance While many experts might say it only makes sense to refinance if you can lower your rate by 1 5-2%, this is not always the case The larger your mortgage balance, the greater the overall impact of a reduced mortgage rate Whereas a 1% reduction in rate may not offset the closing costs on a $100,000 loan, it may make economic sense for a $400,000 loan Once again, you must weigh the time to recoup the closing costs you will incur with your overall interest rate savings . .Your mortgage broker can assist in running through different scenarios with you to determining if refinancing makes sense, and which program and lender is best suited for your needs You can also find various refinancing calculators on the web that can assist with your research .
Source: www.rsstnx.com

Need a Mortgage Loan Get a Free Government Grant to Buy Your Home
Did you know that new home owners can obtain a free government grant for as much as $20,000 to help finance what may be the biggest purchase of your life? Your state government wants to help you buy your next home, and they are providing thousands of dollars in free grant money to make sure you do . .This is money that can be used for a down payment on your house, to help you closing costs, or even pay down part of your mortgage That’s instant equity for you because a grant is not a loan You will never have to pay the money back . .These funds are available to taxpayers who are at least 18 years old There are minimum eligibility requirements, but there’s nothing stopping you from applying for as many grants as you like, as many times as you like . .When you apply for a government grant, you can get approved and have cash in hand in as little as a week In some cases the money will be directly deposited to your account, which could help speed up the closing process . .Applying does not require a credit check or any kind of collateral, but your state could offer a number of different grant programs to apply for When you search the grant database, you’ll see all the options that are available to you, along with the applications and information you need to obtain your grant If you get stuck, just use the available grant writing assistants to help you get the most amount of money possible . .Access Government Grant Sources and get your first check in as little as 7 days Thousands of dollars may be available to you now, but you have to ask for it .
Source: www.rsstnx.com