3-Step Guide to Refinancing Your Home
Refinance Dallas Mortgage
Step 1: Time to decide
There are several variables that will help you decide whether or not refinancing is best for you. Ask yourself the following questions to get your decision process started.
Why should I refinance?
While all of these variables will factor into your decision about refinancing, perhaps the most important question to ask yourself is why refinance? Most people choose to refinance their home in order to lower their monthly mortgage payments. National Mortgage rates have dropped significantly and are currently at the lowest levels recorded since Freddie Mac began surveying rates in 1971. If the current mortgage rates are lower than when you obtained your original loan, you may be able to cut your mortgage payments down significantly. Contact our Dallas mortgage experts at (512) 524-8077 for more information.
Another reason many people choose to refinance is because they want reach into the equity that has built up in their home since they purchased it. In this situation, homeowners can do a “cash out refinance” in which they take out a new mortgage based on the home’s current worth. Then, the homeowner will pay off what is still owed on the existing loan and pocket the difference.
Maybe you are looking to shorten the period in which you will be making payments. If this is the case, you could refinance and swap your current 30-year mortgage for a 15-year or a different duration. If mortgage rates have dropped enough, you may be able to accomplish this with very little increase in your monthly expenditure.
One last reason that many people choose to refinance is to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. By doing so, homeowners will pay a set amount each month regardless of what the market does versus paying a different amount each month depending on the market’s conditions. However, some people do exactly the opposite. Since ARMs often start off with substantially lower rates than fixed-rate mortgages, some may switch from a fixed-rate to adjustable-rate mortgage. Our mortgage team can assist you with deciding which loan is right for you.
When should I refinance?
The typical rule of thumb is, if you can reduce your current interest rate by 1% or higher, it may make sense to refinance. First, you will want to calculate your monthly savings if you do the refinance. Next, ask your new lender to calculate your total closing costs for your new mortgage shall the refinance go through. Finally, decide whether or not you will remain in the house past your break-even point. If so, refinancing probably makes sense. For more information regarding the best time to refinance your mortgage, contact a Team Candy representative at (512) 524-8077.
Step 2: Prepare
Because refinances follow essentially the same process as purchase home loans, you will have to go through the same steps as before. First thing’s first, gather all of your records and make sure your credit profile is in good order. If you have a good payment history with your current loan, you will have the upper-hand with refinancing. If lenders can see you have a good credit history, the qualifying process is likely to go very smoothly.
Next, we recommend collecting the necessary paperwork. Your loan officer will need to verify employment, income, and account balances; therefore, we recommend gathering paystubs and account statements. For more information on the required documents, contact a Team Candy refinance mortgage professional at (512) 524-8077.
Step 3: Consider your loan options
By now, you have probably realized you have several loan options when it comes to refinancing. Team Candy provides fixed-rate home loans of 15 and 30 years, adjustable-rate mortgages with varying adjustment periods, government loans (FHA and VA), conventional and jumbo home loans. To find which loan best suit your refinancing needs, contact a Dallas mortgage expert by calling (512) 524-8077 or filling out a form on the right-hand side of this page.