There are three main reasons that consumers consider a Houston refinance mortgage. They are lower rate, cash out (or debt consolidation), and converting from adjustable to a fixed rate.
For a rate refinance an important consideration is the closing costs to be paid. If there are typical closing costs it is usually advisable to refi if you can save ฝ percent on your rate or more. With a “no closing cost” loan it can make sense to refi with 1/8 percent savings or more. The no closing cost option is not always the best choice. If a mortgage with some closing costs is available at a better rate you should consider the payback time. This is a calculation of how long it would take a rate savings to recover the closing costs. If the payback is 4 years and you plan on having the loan longer than that it may be the better deal.
For cash out refinancing there are rules that are commonly called “Texas cash-out” rules. The key part of this is that the loan may not exceed 80% of your homes appraised value. For example if your home is worth $100,000 and you currently have a $50,000 mortgage, the maximum cash out would be $30,000 (less closing costs). It is usually not advisable to do a cash out refi if it would result in a higher rate than you currently have. If you can't get a equal or better finance rate it may be better to do a second mortgage or home equity line of credit instead (HELOC). Ask a good loan officer or mortgage broker to show you options and explain the differences.
It is usually advisable to convert from an adjustable to a fixed rate mortgage only if the fixed rate is equal or better. Some adjustable rate loans have a prepayment penalty the first two or three years. In some cases it can be best to wait until after the penalty clause expires to refinance.
For all refinance mortgages it is important to get the best possible rate and terms. Your credit, income, and loan to value ratio will be factors for your rate and terms. Your goal should be to get the best program that you qualify for. There are a lot of mortgage programs available in the marketplace. In general the best include some Fannie Mae/ Freddie Mac programs, and VA conforming loans. Next might be other conventional “A” mortgages or FHA loans which are very good. Alternate A loans are next, these are loans that don’t quite fit the top tier because they are very large (jumbo), or for another reason like not documenting your income. Next could be Fannie/Freddie programs that are for those with less than perfect credit (sometimes called A- mortgages”). Next to last would be “sub-prime” loans. These are for consumers with more difficult to finance mortgages because of credit or other reasons. The lowest category could be called “hard-money” loans. Some lenders will do this type of mortgage at a high rate regardless of severe problems if there is a large amount of equity.
I suggest dealing with a lender that has a large variety of programs to select from. If you shop a lender that only does one type of mortgages you will probably be turned down if you don’t fit their program. When you shop a lender that doesn’t do FHA loans, they may suggest a lower category mortgage with a higher rate. And it is better when a lender offers a choice of programs, rather than just one.
Texas residents can visit our Houston refinance mortgage site for more information. You can also call my office at 281-537-7800.
Mortgage Rate Calculators - Valuable Tools For Getting The Best Loan
Are you looking for some inside information on refinance mortgage rate calculators? Here's an article that can help provide information for you to find the best rates for your mortgage.
Refinancing is a smart move if you want to lower your monthly payment and overall interest on your bills. With refinance mortgages, you are also able to change the term of the loan to a shorter one so you can pay off the loan earlier and save more on interest.
There are actually several reasons why people want to take a refinance mortgage. This is also why refinance mortgage rate calculators are important. Refinance mortgage rate calculators help consumers determine the amount of savings they can make on their chosen loan type. Refinance mortgage rate calculators also aid you in finding out how much is your monthly payment for your refinancing loan.
The Internet refinance mortgage rate calculators show you the monthly payments you need to make for your mortgage. Aside from that, these refinance mortgage rate calculators also show you the total interest rate. If you’re more concerned on how much saving you will be able to make with a refinancing loan, refinance mortgage rate calculators will also help you on that.
It seems like new information is discovered about something every day. And the topic of refinance mortgage rate calculators is no exception. Keep reading to get more fresh news to help you make a wise financial decision.
The refinance mortgage rate calculator will ask you for your current loan information. For instance, on the refinance mortgage rate calculator, a field labeled Principal Balance will be provided along with the Monthly Payment and Annual Interest Rate fields. You need fill these up in order to start using the refinance mortgage rate calculator.
To complete the process, the website’s refinance mortgage rate calculator will also ask for your new loan information. Another three fields will be provided in the refinance mortgage rate calculator. The refinance mortgage rate calculator fields are: Annual Interest Rate, Term, and closing Costs. By checking on the Finance Closing Costs at the bottom part of the refinance mortgage rate calculator and then hitting the Calculate button, you can determine how many months it will take for your loan to break even on the closing costs.
For example, for the Principal Balance field on the refinance mortgage rate calculator, you put in $150,000 (Take note that the amount you place in this refinance mortgage rate calculator field represents the remaining pay-off balance). The Interest Rate of your current loan is 6% and the data you put in the refinance mortgage rate calculator Monthly Payment field is $899.30.
For the New Loan Information portion of the refinance mortgage rate calculator, you place the following data: 5% Annual Interest Rate, 30-year Term, and $0 for Closing Costs. Make sure that you check the box for Finance Closing Costs at the bottom of the refinance mortgage calculator before hitting the Calculate button.
The results of the refinance mortgage rate calculator would show you that your new monthly payment would be $805.23, $93.77 short of your current loan monthly payment. The refinance mortgage rate calculator would also display the difference in the interest rates of both loans. With the refinance mortgage rate calculator, you will be able to find that the total interest of your current loan would be $173,757.28 while your new interest after refinancing would be $139,883.68. This allows you to save $33,873.61 on interest.
As your knowledge about mortgage calculators continues to grow, you will begin to see how easy it is to get the best loan available. Knowing how these type of tools work is important when making large financial decisions.
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