It is usually tough to make decisions about properties. For one thing, they involve some serious amount of money; for another, the decision you make can affect your life in the long run.
Before you even consider to refi a mortgage, Houston, TX, see to it that you put every factor into consideration. With that said, you may want to consider the following questions about the refi mortgage.
Why is it necessary to take into account the equity in your home? Because it is one of the factors affecting interest rates. Most traditional mortgages require insurance when the loan-to-value (LTV) is greater than 80%. You can qualify for lower rates when LTV is less than 80%. The lower the LTV, the lower the risk the loan is.
If you do not already own 20% or higher of your home’s total equity, you may want to reconsider refi mortgage, Houston, TX, as you may face more hurdles to refinance, which includes paying for private mortgage insurance.
You get a more favorable refinancing when you have a better credit score. Remember, your lender will investigate your credit history – they would know. One course of action you can take is to pay down – or pay off – small revolving debt before running your credit application. This can help to boost your FICO.
Aim to get a credit score of 760 or higher to have better chances of getting the best interest rates available.
Mortgage refinance isn’t free. Usually, you spend about 3% of your principal or the total amount of money you borrowed. In addition to that, you are going to spend on any third party costs such as title insurance, settlement fees, appraisals, and taxes.
Your mortgage broker or advisor should be able to provide you more insights about such costs. Figure out the numbers and decide based on what the number is telling you.
It does not make sense to go for mortgage refinancing if you are not staying in the home for a few years. Refinancing benefits you in the long run. If you are planning to move out before reaping the benefits of refinancing, then you might want to reconsider this mortgage option.
Do you have more questions about refi mortgage, Houston, TX? Don’t hesitate to contact us here at HomePlus Mortgage.