The year 2020 witnessed a significant rise in mortgage refinancing, with more than 8 million people refinancing their loans, as reported by the Wall Street Journal. According to experts, the actions were fueled by the fact that people spend most of their time at home, not to mention the interest rates were historically low throughout 2020. This year saw its fair share of mortgage refinancing as well. Keeping that in mind, we felt it best to brush up on the current refinance rates in Houston and help the readers understand why refinancing is a beneficial option for them.
Advantages of Refinancing Your Mortgage
Mortgage refinancing is the process of creating a new mortgage by reviewing and modifying the terms and conditions of the old loan. It is a great option for homeowners in Houston, who are aiming at either lowering the mortgage payment or paying off the loan fast. It's best to clarify here that refinancing is not the same as getting another loan. It is how you can end up with a mortgage that has more favorable terms.
Now, let’s get on with the benefits of mortgage refinancing. People usually opt for refinancing because:
Opt for Cash-Out Refinancing
This is when a homeowner takes out a new mortgage acquiring a loan amount that is more than what he/she owes from the first mortgage. It is similar to a home equity loan. The difference with the balance amount is used to pay off credit card debt and medical bills; also to renovate the house. Cash-out benefits you by generating cash flow to pay off other debts.
Enjoy Flexible Loan Terms
Often the homeowner ends up with a mortgage with stringent terms. Well, you can always straighten it out with a mortgage refinancing and get favorable terms by revising the old loan.
If your credit score has increased since you got the initial loan then you can refinance and apply for lower interest rates. With a higher credit score, your interest rate will become low, benefitting you through more savings.
Low Monthly Payments
The most common reason people opt for mortgage refinancing is to lower the monthly payments. With low-interest rates, you get to save in monthly payments, not to mention, pay off the loan faster than anticipated.
When refinancing your mortgage, make sure to check out the current refinance rates in Houston with your finance broker or lender. It usually varies in each case and depends on the present market dynamics.
AUTHOR BIO: Joan Gallardo, a Senior Loan Officer has 18+ years of experience with significant knowledge about current refinance rates in Houston and more.