Mortgage interest rates are at all time lows, so for some homwowners, this is a very good time to refinance. Anyone with an interest rate higher than 5.88% should consider refinancing right now if there are no plans to move. If your interest rate is lower than 5.88%, it might not be worth doing a refinance. You already have a competitive interest rate. If you decide to do a refinance, make sure you are not paying any points, origination fees, escrow waiver fees, or a discount rate. It’s not a good idea to refinance if you are contemplating a move or think you might move in the next two years. Also not a good idea to do a re-fi if you have less than 20% equity in your home. You should have more than 20% equity before doing a refinance. Sometimes cash from a refinance is tax free, so check with your loan officer and accountant to verify whether your cash out money qualifies as tax free. The best recoup period is two years when you do a refinance. The goal should be to not only lower the interest rate, but also the monthly payment. If you can reduce the years (term of the loan) to 25, 20, 15, or a 10 year mortgage and still reduce the rate and monthly payments you are the perfect candidate for a re-fi! Remember that if you refinance your home in September, your next payment will be in November. Refinancing past October gets complicated if you have an escrow account (which most consumers have.) The escrow account collects your twelth tax payment in October. County taxing authorities take months to log paid taxes.
If you are contemplating a refinance, please contact our in-house lender, Terry Traylor, today! He can help you decide if refinancing is a good option for you. You can call our office at 281.288.3500 to speak with Terry. If you would like to apply for a mortgage, you can apply at RREA.com under our mortgage section.