Austin Texas Real Estate Blog

Since mortgage interest rates have constantly kept themselves at approximately 5% for fixed rate mortgages, the idea of home refinance is attracting numerous homeowners. Refinancing to a lower rate would reduce your monthly mortgage payments. The present day economy and troubled real estate market pose a number of risks to the homeowners.

Home refinance cash

When the real estate market is down, you should always try to refinance your mortgage. If you’re facing problems with your adjustable rate, higher mortgage payments, reduced equity or lower income, then home refinance is a useful means to get rid of your anxieties. When property values are going down and lenders are making stricter guidelines, it becomes more difficult to take out a new loan. Hence, if you get the chance to refinance even in this market condition, you must not lose it by any means.

What is home refinance?

When you go for refinancing, your existing mortgage is substituted by another mortgage with more affordable loan terms. Since you’re taking out a new loan, you normally have to pay the following fees:

• Escrow fees
• Title insurance
• Points (optional)
• Lender fees
• Credit reporting fees
• Appraisal fees
• Any amount necessary to get your tax and insurance obligations current

What the importance of home refinance is in today’s real estate market?

Homeowners resort to refinancing for various reasons, but following are some of the most familiar ones why refinancing is important in the present day real estate market:

Refinancing helps you save money by reducing your interest rate

If the interest rate of your existing mortgage is more than the prevailing market rate, you would save by refinancing.

Refinancing can reduce monthly payments

Even though the interest rates do not go down, home refinance can reduce your monthly payments by beginning a new loan term. For instance, if you obtained a 30-year FRM for $300,000 10 years back, you might just owe around $250,000 at present. However, if you refinance it to another 30-year FRM for $250,000, then you have a complete 30 years to pay it back. It signifies that your monthly payment would be lower. Had you retained your previous loan, you would have paid it off in 20 years. The drawback of reducing your monthly payments is that you would end up paying more on interest.

Refinancing lets you switch loan types

If you have an ARM Adjustable Rate Mortgage, your monthly payment might go up when the rate is adjusted. You might need to shift to a fixed rate mortgage that has a steady payment.

Home refinance helps you receive cash

When you go for a cash-out refinance, you obtain a new mortgage for an amount which is higher than you owe on your existing mortgage. Subsequently, you walk off by taking the difference. A cash-out refinance is quite hard to obtain in recent times though several homeowners opted for cash-out refinancing to fund home improvements in the last one or two years. For getting a cash-out refinance, you should have substantial equity in your home since it is likely the bank wouldn’t lend you an amount which is higher than your home value.

Though most borrowers have a tendency towards keeping their existing mortgages, refinancing in a tough real estate market can better your financial condition in various ways.

Thanks to guest blogger: Peter Gomes!

Asset protection is a term many home owners are well aware of, however first time home owners often know little about. Asset protection is the insurance designed to help protect your real estate and the assets within your home, in the event of unexpected emergency. Often this focuses on financial disasters, however, it is not limited there to. In the end, it is the asset protection that assures the value of the property regardless of the unexpected.

Old time asset protection

When you begin your investigation into asset protection you will need to investigate all possible options. Once you have reviewed the benefits of each option and settled on a plan there will be an assessment done on your home. The insurance company will also asses the demographics of your area. From there they will combine the results and provide an estimate of how much protection is available to you and your home. The agent will take the time to explain the programs they have available and how to select one. Discuss this with your real estate attorney prior to signing the documents.

The final protection will be defined by the state and counties laws in the area. Typically, retirement and disability benefits are not included as part of the protection, however in very unique circumstances it could be made possible. Personal items, such as jewelry, clothing and furniture are also not covered as part of this umbrella; however some states allow a percentage of these assets to be covered.

To assure what you own receives the best coverage when it is needed most, then your hunt for real estate shouldn’t include just loan and house hunting. The search needs to also include your asset protection evaluation. Protect what you have and you will find it is there for years to come.