Odessa Rate & Term Refinance

Do you wish to benefit from rate changes that have taken place since you first obtained a loan? Are you having issues with your mortgage payments each month? Do you want to switch to a shorter term to reduce interest costs and pay off your mortgage sooner?

With favorable interest rates and numerous new financing options available to homeowners, a rate-and-term refi can be a fantastic tool for anyone looking to lock in monthly savings or pay off their home more quickly.

3 Reasons To Refinance Your Mortgage

Existing homeowners can obtain better loan terms through a rate-and-term refinance. By refinancing your mortgage, you can essentially replace your current loan with a new mortgage arrangement that offers better financial terms and rates.

Here are the top reasons to refinance your mortgage:

     – Lower interest rate

One of the main reasons to refinance your mortgage is to get a lower interest rate. With a lower interest rate, you can save hundreds or even thousands of dollars over the life of the loan, which can improve your monthly cash flow. 

     – Change the loan terms

Changing the term of your mortgage loan to 15 or 20 years can help you pay it off quicker and get out of debt faster. The savings over time can be substantial when you factor in a lower interest rate, but also keep in mind that you will have to budget for higher monthly payments.

     – Switch to a different type of loan

When the fixed-rate introductory period of an adjustable-rate mortgage (ARM) expires, the interest rates are low. Changing to a fixed-rate mortgage provides security and protection against future interest rate increases. 

How Much Does Refinancing Cost?

Although refinancing is expensive, it may be worthwhile under certain conditions. You will have to pay various fees to close the loan, such as the origination cost, home appraisal cost, and the loan’s recording fees. Expect to pay between 2% and 5% of the total loan amount in fees. 

It is, however, possible to reduce your overall refinancing costs by:

           – Boosting your credit. Before refinancing your mortgage, you should focus on enhancing your credit score and debt-to-income ratio to obtain the best rate possible.

           – Negotiating fees. You are in a strong position to negotiate if you have solid credit and a steady income. Use this to your advantage by requesting the lender to waive any applicable fees, such as the origination fee.

           – Working with the same title insurance company. You can save significantly on title fees if you work with the same title insurance company you used when purchasing your home. 

           – Not paying for mortgage points. Mortgage points are fees paid to the lender to lower your interest rate and monthly payment. However, if you have good credit, you may be able to qualify for a low-interest rate without having to pay mortgage points.

           – Comparison shopping for third-party fees. Consider the most affordable options for third-party services, such as title search, home inspection, and survey.

           – Requesting to waive the appraisal fee. Lenders might forego ordering a new appraisal if the property has been recently appraised and market conditions have not changed significantly.

Is Refinancing Worth the Cost?

But how do you determine if it’s beneficial to refinance your mortgage? The answer will vary based on the specifics of your situation, but it all comes down to what you hope to achieve by refinancing your mortgage.

     – Interest Rate Savings

Are you thinking of refinancing your loan to save money throughout the loan’s lifetime? Calculating how much you’ll save after factoring in fees and costs would be best. Refinancing may cost you more money than you’ll save if you plan on selling your home sooner than the five-year payback period.

     – Lower Monthly Payment

You should consider the benefits and drawbacks of refinancing if you’re hoping to lower your monthly mortgage payment. It may not be the best choice if the money you would save each month goes toward closing costs.

Apply For a Rate & Term Refinance

If, after giving it some thought, you still think that refinancing is the right move, Capital Home Mortgage can help you get started. As a direct mortgage lender in Odessa, Texas, we can offer you the most attractive loan terms and interest rates.

What are you waiting for? Get prequalified with us today!