5 reasons you may want to refinance your Texas home this year. I know the market well and McKinney home owners can save thousands by refinancing, especially exiting FHA home owners.
Mortgage rates are near historical lows, but could climb. The Federal Reserve raised the Prime Rate this year and may raise it again this month. Mortgage rates may eventually follow, even though they’re not directly tied to the Prime. If your mortgage rate is more than 1% above current rates, it could make sense to refinance soon.
Home prices have risen. In many areas, prices are up and so is owner equity. If your home’s value has risen, you may be able to:
• refinance with better terms;
• drop private mortgage insurance when your equity reaches 20% of your home’s value;
• put money in your pocket with a cash-out refinance.
• If you have an FHA mortgage you could drop your monthly mortgage insurance that stays with your loan for life.
Paying MIP for life suggests that you’ll make mortgage insurance premium payments to the FHA from today until the day you die. The truth is something different.
The FHA’s official policy states that loans with an LTV over 90% must maintain MIP for as long as the loan is active. All other loans must pay FHA MIP for a period of 11 years.
The current FHA mortgage insurance premium is shown below :
LOAN TERM INITIAL LTV (%) FHA MIP TERM
≤ 15 yrs ≤ 78 11 years
≤ 15 yrs > 78 – 90.00 11 years
≤ 15 yrs > 90.00 Life of Loan
> 15 yrs ≤ 78 11 years
> 15 yrs > 78 – 90.00 11 years
> 15 yrs > 90.00 Life of Loan
For some FHA loans only, you will pay mortgage insurance premiums until the loan is paid-off in full. This can be as long as 30 years or as few as 1-2 years, if you choose to cancel your FHA MIP with a refinance. As today’s mortgage rates have dropped, this is a route many FHA-backed homeowners have followed. For some consumers, it’s been sensible to ditch the FHA loan with its interminable FHA MIP in favor of a conventional loan with higher rates but lower long-term costs.
You may look better as a borrower. You might get better loan terms if your earnings are up, or if you use the money to pay off debts, which may raise your credit score.
You’ve decided to stay awhile. Stay long enough for your lower monthly payments to recoup refinancing costs. You want to shorten the term of your mortgage. Refinancing may allow you to switch from a 30-year to a 15-year loan at a substantially lower interest rate. Your monthly payment may increase, but you’ll save money over time. In fact one can often save over $100,000 by refinancing a $200,000 mortgage with monthly mortgage insurance.
For more on refinancing, or financing a home purchase, apply online now by click here, email or call us any time (214) 945-1066 … Have a great day!
P.S.: Mortgage rates are near historical lows, so don’t wait to contact us about today’s excellent options.