Refinance Your Texas Mortgage

When interests rates are low, it’s your chance to lock in a lower rate and lower your payments. Oftentimes, first time home buyers in Texas will have a lower credit score when they initially purchase. With a higher credit score accrued over time, and a lower Texas refinance rates with lower interest, you can save a lot of of money in a 15 or 30 year mortgage term.

That means that even when interests rates increase - as they have over the beginning of 2022 - it may still be a good time to refinance, if your improved financial qualifications lead to lower rates for your particular mortgage loan. Get in touch with us to find out if you qualify for more savings!

Why Refinancing Can Help You Save Money

Lock in a Lower Rate

Pay less in your monthly payments

No more PMI (mortgage insurance fee)

Switch from ARM to a fixed rate

Move from 30 yearmortgage to 15 year

Cash out refinance, so you get cash for other stuff.

Buy your spouse or co-owner out on the home

A Cash Out Refinance Helps You Tap Into Your Equity

As real estate prices continue to rise across Texas, you can unlock the equity you've built with home ownership with a cash out refinance in Houston, Texas.

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When should I consider
refinancing my home in Texas?

Here’s the big question for home owners.

“When should I refinance my home?”

And the answer is simple:

Do it when interest rates get too high for an adjustable rate mortgage.
Do it for a fixed rate mortgage if you find a lower interest rate in another fixed mortgage rate contract.

If you refinance your Texas mortgage, it will help you to pay off your home quicker. Remember to carefully shop for your refinanced mortgage so you do not make the mistake of spending even more money on the refinanced option.

What Are The Differences Between Adjustable And Fixed Rate Mortgages?

The Consumer Financial Protection Bureau outlines the difference between an adjustable rate mortgage and a fixed rate mortgage.

The differences will surprise you!

Adjustable mortgage rates are easier to qualify for than fixed rate mortgages. The better credit you have, the more likely you will qualify for a fixed rate mortgage.

First-time homeowners that do not have as much of a credit history will be offered adjustable rate mortgages that usually start out with low interest rates. However, they increase every so often based on the mortgage lender’s discretion.

If you have an adjustable rate mortgage for your home, your interest rates are going to adjust due to the interest rate index that fluctuates with the real estate market.

A fixed rate mortgage’s interest rate stays the same.

How Does A Cash Out Refinance Work?

As you own your home, your ownership can cause your equity to rise in two ways:

Houses in your area rise in cost, causing the value of your home to increase.
The money you're paying down on your mortgage increases your equity in the home, by decreasing the loan.

A cash out refinance is when you take a new loan on your home, for more money that you currently owe on your existing mortgage, and then withdraw that extra cash (the difference in the cost of the new loan, vs what you owed before the refinance) directly to you.

While you can use the money for anything you wish, like renovations to your home and such, you can also consolidate debt by using the cash to pay off other higher interest loans, and save money today.

Refinancing An Adjustable Rate Mortgage

If you are considering to refinance and adjustable rate mortgage on your home, do not go for a lower rate on another adjustable rate mortgage. This will only put you back at square one once that low interest rate increases to as high or even higher than your current interest rate.

Try to see if you qualify for a fixed rate mortgage so that your interest rate does not fluctuate over time. You can save substantial money in the long run by keeping your mortgage interest rate fixed.

Refinancing a Fixed Rate
Mortgage

Only refinance your current fixed rate mortgage if you can find a lower fixed interest rate. Do not go backwards and get an adjustable rate mortgage just for the temporary very low interest rate.

Peruse the fixed rate mortgage market for the best offer that is 1% or less than the interest rate on your current mortgage. It will not be worth it if you can only find an interest rate that 0.10% to 0.50% lower because it will not add up to as much of a substantial savings than higher percentage differences.

Steps to Take When Shopping
for a Refinanced Mortgage

The Consumer Financial Protection Bureau has many free tools for homeowners to use when refinancing their homes.

The general steps to take before closing any mortgage offer includes:

Prep your shopping experience. Get your credit score in order and figure out your budget.
Consider your loan options based on your current situation. Follow the refinancing suggestions above based on your current mortgage type.
Compare all the mortgage offers.
Select the best offer that matches your budget and is a much lower interest rate than your prior mortgage.

Send us a message if you’ve got questions about refinancing. We’re here to help.