Should Homeowners in Texas Refinance Their Mortgage?

Choosing to refinance your mortgage can be a very difficult task. Despite the prospect of lower-level, low monthly payment, or pulling equity out of your house to use for other purposes may seem attractive, there are a number of factors, that the landlord should be taken into account when the decision on whether the time is right. The following five factors to consider when making this decision. 1 The most obvious factor is the low interest rate if interest rates to refinance. Fortunately, Texas mortgage rates tend to be lower than in other parts of the country due to the low risk perception of our housing market. If mortgage interest rates have fallen since your last loan was originated, or if fixed rates are relatively low, and you have a portable mortgage rate, refinancing may make sense. In the case of conversion to a fixed interest rate loans to fixed rate loan, your savings rate can not be that significant, if your primary task is to remove the risk of rising interest rates on your future budget. This low rate environment, you can have the opportunity to lower your monthly payment, while keeping approximately the same as your mortgage, you can also take into account the time of refinancing your mortgage payment to maintain your consistency, but allow you to pay off the loan early. Any of these options, along with your interest savings over the term of your mortgage loan amount can be thousands of dollars. 2 Equity in your home Unlike many areas of the country, many residents of Texas and the South Texas communities, including Spring, Tomball, The Woodlands, and Houston have experienced increases in the value of their house because it was achieved thanks to strong local economy , which continues to grow and the energy crisis of 2007-08. Moreover, the home for Texas - remains high relative to the rest of the United States, which means that probably more than ready source of buyers in markets like Las Vegas or Southern California. Unfortunately, unlike your brokerage account, you can access this easily if you sell your home equity. The alternative would be to refinance cashout refinance for a higher amount than your current loan balance. Because the interest rate on the first mortgage is likely to be lower than credit card or other unsecured debt, and most likely tax deductible, paying off other debt with cash out refinance can be a good financial sense. Keep in mind that there are specific laws in Texas, closed Cash-refinances to 80% of home value, so that your ability to pursue this strategy may be limited by the amount of equity in your home: When you or a term of your loan or interest rates Lower prices, this strategy may allow, your monthly payment remains the same, but you should keep in mind that the additional funding will inevitably mean that you will increase your total mortgage debt. There is no free lunch. 3 You are still in the early years of the early years of your mortgage loan, your payment schedule, a large portion of your payment going towards principal, the tax reduction, but not so great to pay off your loan in the near future. However, this is when it makes more sense to refinance. When you are in the later stages of your loan most of your payment goes toward principal, thereby minimizing the impact of a reduced rate. As a rule, if you simply want to reduce the amount of your loan, you probably will fare best if you refinance within the first ten years of a 30 year mortgage. Otherwise, if you are thinking of taking your house, cash out when your first mortgage balance is low, ou may be better off taking out a second mortgage or home equity line of credit. As we said earlier, your ability to take a Cash-out refinance may be limited by state law. 4 You plan to stay in your home to maximize the value of the refinancing, you should stay in your house 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 to stay in your home only 15 months to break even. On the other hand, if your down payment of only $ 75 per month, it will last you 40 months. Although we all think we will never move, that we have. The average homeowner moves about every seven years, so you should keep in mind as you have about this decision. 5 Do you have a mortgage balance that many experts could say only that it is senseless to refinance if you can lower your interest rate is 1.5-2%, this is not always the case. Great balance of your mortgage, then a greater overall impact on the mortgage rate less the 1% rate reduction can not compensate these costs close to $ 100,000 loan, it may make economic sense for a $ 400,000 loan. Once again, you have to weigh the time to recoup the closing costs, your total interest savings. Your mortgage broker can assist you in running various scenarios to determine if refinancing makes sense, and the program and lender best suited for your needs, you can also find various refinancing Calculators on the web that can help your research.