Refinancing is used to pay off an existing loan by taking a new loan with new terms or conditions over the same property or secured asset. This is very helpful for those consumers who are paying huge installments against different secured loans for many years. A few years back, when the rate of interest was too high and people borrowed loans on fixed rates, they got in great trouble because at that time, the rate of interest was doubled as compared to today. In order to help those consumers, the federal government has come up with new polices and refinancing has been introduced.

Texas Refinancing: – Refinancing in Texas is very popular because of it geological features. Most of the people have borrowed huge loans for buying homes and properties in Texas. These loans are long termed, and they make up huge investments because of the increased value of properties in Texas. The need of refinancing rose when the financial institutions lowered the rates of interest against mortgages. Those people who have taken mortgage loans on fixed interest rate are now pissed off by paying huge installments against small loans.

Types of Refinance: – In Texas, usually there are two types of refinancing available.

– Rate and term Finance: – In this case, a consumer can only change the terms and conditions and rate of interest of the existing loan. For example, if initially your loan is at 8% per annum and is for 25 years, you can lower the tenure to 15 years and rate as per the current market rate.

– Pull Cash: – In this case, a consumer refinances his property on the face value and pulls out more cash for other needs. For example, 10 years back when your property valued $100K, you owed a loan of $80K. After paying the installments of 10 years, the loan amount will approximately become $50K. Now, what a consumer can do is to get refinance on the face value which may exceed to $200K in 10 years. After clearing the existing loan of $50K, a consumer can pull more cash out of his property. This is the most popular type of Texas Refinance.

Refinancing Rules in Texas: – There are some simple rules in Texas used for refinancing which are described as follows.

– Equity: – A consumer cannot get more than 80% of the face value of his property. For example, if the property’s face value is $100K, the loan amount which you can get is $80K. The remaining $20K will be considered as equity of loan.

– Closing Cost: – This is very favorable for the people of Texas that total fees and all charges for refinancing will be less than 3% of the face value of the property. This 3% will include all the charges like broker fee, appraisal, documentation, survey etc.

– 12 days Rule: – The government of Texas wants a consumer to think for the initial 12 days. So, this is a rule that the loan amount will not be dispersed before 12 days after the application of refinancing.
You must hire a Texas refinancing consultant who will guide you to get the best possible offer according to your needs and financial conditions.

Author Bio: Jon has been in the Texas Mortgage business for many years. One of the people he respects is Seth M Reeves. He does a good job with Texas Refinance and overall all house loans.

Category: Real Estate
Keywords: texas mortgage, refianance, loans, business