This article is sponsored by Trinity Oaks Mortgage.
Trinity Oaks Mortgage burst on the scene here in Frisco earlier this year offering a simple process to homeownership that ensures your home buying or refinancing experience is straightforward and stress-free.
Their objective is to uncover the customer’s financial goals and guide them through a process that’s not only easy to understand but tailored specifically to their financing needs.
We sat down with Derek Freitag, the Regional Sales Manager based in Trinity Oaks Mortgage’s Frisco office at the Shops at Starwood. Born and raised in Texas, Derek brings over a decade of experience in the banking, finance and mortgage industry.
He answered some really common questions about home financing – and shared why right now could be a smart time to talk to a lender.
Talking it out is always a good idea.
While online programs are readily available to assist an individual in mortgage research, Derek believes there should be a balance between in-person contact and technology. The customer should be guided step by step through various home buying or re-finance options.
Whether they’re a first-time homebuyer, looking to trade up, deciding to downsize, or simply wishing for a change, Derek can help you well before you ever make an offer on a property.
It’s a great time to get a loan.
With current market rates at historic lows, homeownership is becoming increasingly attractive. However, for those of you already settled into your dream home, refinancing is another option to consider.
Taking this route can help you lower payments, reduce your mortgage term, or free up some cash for other home projects or investment plans.
Think of your dream to walk out of your back door and dive into your own pool. Or how about an HGTV-inspired bathroom or kitchen remodel? Does a patio makeover, outdoor kitchen, and firepit sound heavenly?
While there are many reasons to consider re-financing, Derek outlines the most common options:
- Lowering your interest rate and payment. This is the most popular reason. If you have a 5% interest rate or higher, it might be worth exploring if you can take advantage of the current lower interest rates to reduce your monthly payment and overall cost of the loan.
- Reduce the term of your loan. If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner.
- Cash-out refinance. With home prices increasing, you might have enough equity to cash out and invest in something else, remodel your home, purchase a vacation home, pay off high-interest debt, or start a new business.
Refinancing could make a big impact.
Of course, the question on everyone’s mind – “Is it worth it to refinance to lower your interest rate and payment?” Here are some simple examples to break down what it could mean to the average Frisco homeowner.
Let’s say you have a $400,000 home loan. The refinance costs will be approximately $16,000. If you were to lower your interest rate from 5% to 4%, then refinancing is going to save you approx. $237 per month.
To break even ($16,000/$237), you need to continue owning your home for a little over five years.
Again, using the same example in which you have a $400,000 home loan with refinance costs of $16,000: if you were to lower your interest rate from 5.5% to 3.5%, refinancing is going to save you approx. $475 per month. To break even ($16,000/$475), you need to continue owning your home for a little over 33 months (just less than three years).
There’s an easy way to crank the numbers.
Take the time to key in some personal figures using the Trinity Oaks refinancing calculator. Then reach out to any of the Trinity Oak Mortgage loan originators who can provide you with a breakdown of the return on investment, and monthly savings.
The fees associated with refinancing are often about 3% to 6% of the loan amount. To figure out if refinancing is worth it, consider whether you’ll still be in your home by the time the monthly savings that are accumulated by refinancing, equal the refinancing costs.
Refinancing for the right reason with a good rate and a suitable term can enhance your financial position. Derek adds,
If your current home is not meeting your needs, you might want to consider purchasing a new move-up home.”You will still likely be able to get a lower interest rate than the one you have on your current house and you can also use the equity you’ve built in your this home towards the down payment and costs of purchasing the home of your dreams.