When Refinancing Makes Sense – and When it Doesn’t

Many Texas homeowners are asking themselves if now is a good time to refinance. What the answer is for you depends on many factors. Let’s walk through the most important ones.

Time you plan to remain in your home

This is perhaps one of the most important considerations. If, for example, you are planning on moving to a different home within the next few years, refinancing just might not be for you at this time. But if you plan on staying in your existing home for at least five to seven more years, then now could be a good time to refinance your home loan.

The interest you’re currently paying

If you only recently got your home loan and already have a low interest loan, then the interest savings you get from refinancing your home loan may not outweigh the costs involved. Because a refinance is a home loan, it requires most of the usual steps taken with a purchase loan, including appraisal, and therefore comes with a variety of fees. If you have a higher-rate loan, the savings from lowering your rate may outweigh those costs. At Crystal Clear Mortgage, we can detail all your anticipated costs and interest savings to make sure refinancing is right for you.

The type of loan you currently have

Maybe you are currently in a shorter-term mortgage, for example, but need a longer term for a lower monthly payment. Or maybe you are looking to change from an adjustable-rate mortgage to a fixed-rate mortgage to avoid the risk of future rate increases. You may also need to change who is responsible for paying the mortgage, such as after a divorce. (Please just keep in mind that removing an ex-spouse from a loan does not remove them from the deed, as that is a separate step.) In any of these cases, refinancing may be a good option for you. If you are paying FHA loan insurance, a refinance to a conventional mortgage may also eliminate that cost for you.

Whether you need cash

If you’ve built a lot of equity into your home and need cash for a major expense, or if you need to consolidate high-interest-rate debt, a Crystal Clear Mortgage loan officer can work with you to make sure that refinancing is a good option for you.

At Crystal Clear Mortgage, we’re committed to ensuring the home loan you have is the right one for you. Let’s talk, or see our home refinance loans.