Buying a home was probably one of the most significant financial decisions you've made. Now you are thinking about refinancing. Your decision will have financial consequences for many years to come.
Therefore, it is important that you understand exactly how the financing process works, what your options are and how you can determine what is the best option for you and your family.
I. REFINANCE (10 Things To Consider Before You Decide)
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Should I Refinance?
- To lower your interest rate thereby reducing your monthly payment.
- To shorten the term of the loan saving thousands of dollars in interest.
- To cash-out on equity
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What Is LTV?
- LTV stands for Loan To Value. LTV is the ratio of the loan amount to value of the property. For example, if a property is worth $300,000.00 and the loan amount is $240,000.00, then the LTV is 80%. Generally, the greater the LTV, the greater the risk, thus the higher the interest rate.
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What Factors Determine The Interest Rate For A Specific Borrower? (other than economic conditions)
- Loan Program – (fixed or adjustable rate / 40 or 30 yr)
- LTV
- Documentation Type – (full, stated, no doc, etc)
- Points
- Property Type – interest rates are always lower for primary residences vs. investment property
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How Much Will Closing Costs Be?
- No down payment does not mean no closing costs. Pre-paid items, insurance, escrow for property taxes, insurance, title insurance and services, origination fees, etc all must be taken into account. Closing costs on purchases may be different than closing costs on refinances. Ask for our “HUD” Settlement Cost Brochure.
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Fixed or Adjustable Rate Mortgage?
- The most important question is how long do you plan to keep the property? If the answer is 5 yrs or less, it may be better to get a mortgage fixed for that number of years. If you are more conservative, then a fixed rate term may be more attractive.
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Will I Have To Pay A Penalty If I Refinance And Payoff My Current Mortgage?
- If you purchased your home or haven’t refinanced in more than 3 years, chances are you do not have a pre-payment penalty.
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Will I Have To Show Proof Of Insurance? Assets? Employment?
- Generally, the more documentation you provide, the lower your interest rate will be.
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Will I Have To Pay PMI?
- PMI stands for private mortgage insurance. PMI may be required for LTV more than 80%. If so, the solution may be to get a combo loan with the combined LTV (CLTV) over 80%. Ask us for more information.
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Can I Refinance An Investment Property or Second Home?
- Usually yes. Investment properties and second homes can be refinanced like a primary residence either to reduce the payment, the loan term, or to take cash-out. However, these types of properties are more risky than a primary residence so loan parameters are more restrictive. The LTV will be lower, the interest rate will be higher, etc.
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How Can I Reduce My Mortgage Payments As Much As Possible?
- The most common reason for refinancing is to reduce the monthly payment. You will need to consider an interest only loan, 40 yr. mortgage, or adjustable rate mortgage as some options. Ask us for more information.
II. PURCHASE
Purchasing real estate may be the most significant financial obligation you may encounter during your life time. Therefore, it is very important that you evaluate your options and programs before taking that “big step”. At United Mortgage & Investment Group we realize just how important your decision is and we strive to find and provide those options. We want customers for life, so we are an integral part of the process. Loans are what we do and we’re good at it!
To start the refinance process: Click Here
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Phone: (713) 266-8401 / (800) 700-5970
Fax: (713) 266-0106
Mon-Fri 9:00 am to 5:30 pm (CST) |
Member – Texas Association Of Mortgage Brokers (since 2000)
Member – Better Business Bureau of Metropolitan Houston (since 1999)
Member – Texas Real Estate Association (since 1995)
Mortgage Broker License # 13570
 
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