Home refinance, Fort Worth, TX, needs careful evaluation. After all, any mortgage transaction can involve a serious amount of hard-earned money that should not go down the drain. The goal is to ensure that you are on the right track in your refinance application and avoid financial hurdles along the way associated with your refinancing decision.
When does home refinance, Fort Worth, TX, make sense? Here are some scenarios that justify refinancing is, indeed, the way to go.
When you want to secure a lower interest rate
If there is a significant reduction of mortgage interest rates in the market, it could be the best time to refinance your mortgage. The rule of thumb is that if you spot a 2% reduction, you should take advantage of that opportunity to secure a refinance deal because that could translate to thousands of savings.
When your goal is to shorten the loan’s term
Is there a significant drop in interest rates? Do you currently have a 30-year fixed mortgage? If yes, this could be an ideal time to do a mortgage refinance, Fort Worth, TX. That means you can shorten the loan’s term without much change in the monthly payment.
Let’s figure out the number by this example:
If you have a 30-year fixed-rate mortgage on a home valued at USD 100,000, refinancing from 9% (your current mortgage rate) to 5.5% (new rate) can cut the term in half to 15 years. You can pay off your loan earlier.
When you intend to convert to an ARM or Fixed-Rate mortgage
If interest rates continue to increase, refinancing a mortgage can be a viable tool to shield you from their ripple effect. That is when you refinance to convert an ARM to a fixed-rate mortgage. Converting to fixed-rate mortgages results in a lower interest rate and eliminates concern over future interest rate increases.
The opposite is also true when the interest rates are falling. Converting a fixed-rate loan to an ARM can be a sound financial strategy in cases of falling interest rates. It can even be more advantageous for those who do not plan to stay in their homes for longer years.
Online looking for a mortgage company that can guide you through the process of home refinance, Fort Worth, TX? Talk to an expert at HomePlus today.
