Austin Real Estate Update

There are many financial guru's, mortgage brokers and real estate agents out there that argue over should you refiance, pay extra on your mortgage or leave it be.  All of them are right given certain circumstances.  However, all of them use formulas and vocabulary that not only overwhelms most of us but also makes us scared to do anything.

I like to keep and make things simple.  I offer no ivy league vocabulary or complex formulas that most of us can't understand.  Here it is in plan simple english.

There are only two questions to ask yourself...

Are you planning to keep your for at least another 3 to 5 years?

Is your current interest rate 5% or above?

If you answered yes to both of these questions, than re-financing will most likely SAVE you MONEY.

To be absolutely sure, consult a local mortgage broker and have them run the numbers to see what your new monthly would be.  Also, there are closing costs associated with re-financing which can be added to your new loan in most cases but that will effect your new payment as well.

Keep in mind in order to re-finance you must have at least 20% equity and you will go back to a 30 year mortgage.

Whether you re-finance your home or not, I do believe in adding a few dollars per month to your P & I payment.  I usually add $25 or so to mine.  Not much enough to notice out of my pocket but enough to see your loan balance go down much faster.  Thus you will pay less interest and pay it off early.

Lastly, for those of you that want to pay your mortgage off early and can afford a higher payment, re-fiinance to a 10 to 15 year mortgage.  These types of loans offer even better rates.

For more information, call Mike Cusimano with Premiere Team Real Estate at 512-795-9918.