Amarillo Rate and Term Refinance

Have you been struggling with making your mortgage payments? Perhaps you could take advantage of rate changes since the original loan was obtained and achieve a more convenient way out of this challenging financial journey. It may be time for a rate and term refinance! 

By refinancing, you can pay less in interest or combine different types of loans into one cheaper payment plan and access better terms that are tailored just right for you.

Capital Home Mortgage, a full-service Mortgage Company, is your one-stop shop for all your refinancing needs, including a rate and term refinance in Amarillo. We’ll work closely with you to understand your financial goals and objectives. 

What Is a Rate & Term Refinance?

A rate and term refinance is an up-to-date loan that pays off an existing mortgage and makes payments toward a new loan as you refinance, allowing you to change your current loan terms and replace them with what favors you.

Rate and Term Refinance Basics

The process of refinancing is quite simple. You start by applying for a new loan and then using the proceeds to pay off your current mortgage. It may sound like you’re just swapping one loan for another, but there are some crucial differences.

A refinance usually comes with a lower interest rate than your original mortgage. It saves you money over the loan, as you’ll pay fewer interest charges. You can also choose a new repayment term that suits your current financial situation.

Another key difference is that it allows you to access the equity you’ve built up in your home. When you take out a new loan, the lender will appraise your home to determine how much it’s worth. You will have equity you can draw from if the appraised value is higher than what you owe on your present mortgage.

Requirements of Rate and Term Refinance

As with your initial loan application, you’ll need to meet the standards of any lenders before they can approve a refinance. Here are the requirements you may need to meet:

     – Closing Costs: When you refinance your mortgage, be aware that there are often closing costs, including 2% – 6% of the principal balance on your old loan or even more.

     – Credit Score: You’ll need a good credit score, at least 620, to qualify for the best interest rates for a conventional loan. You might get a better offer if your credit has improved since you obtained your first mortgage.

     – Debt-to-Income Ratio: Doing a quick calculation on how much you can afford to repay each month and sticking within that amount is key when refinancing with Capital Home Mortgage. If your debt-to-income ratio exceeds 50%, you might have difficulty securing a loan.

     – Home Equity: Equity is the difference between your home’s appraised value and the balance on your current mortgage. To access the most favorable interest rates, you may need at least 20% equity to qualify for a refinance.

Apply for a Rate and Term Refinance in Amarillo

A rate and term refinance can help you achieve several different financial goals, from saving money on interest to consolidating multiple loans into one manageable payment. If you’re interested in exploring a rate and term refinance in Amarillo, our experts at Capital Home Mortgage are here to help.

Contact us today at (806) 589-3428 to discuss your option with our professional loan officers in Amarillo.