Mortgage Refinance
Get a nice new loan for your home sweet home
Our professional lenders can lay out all your options
When should you consider refinancing the mortgage on your North Texas house, townhome or condo? If interest rates have dropped since you obtained your current home, it's an easy call. But there are other scenarios where a new DATCU loan might also make sense:
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You may be able to reduce monthly payments by spreading out the remaining debt over a longer period.
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You may be able to reduce overall interest charges by moving to a shorter term mortgage.
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If your original loan is with a big nationwide bank, you may want to refinance with a local credit union you trust, like DATCU.
- If you have an adjustable-rate mortgage, you may want to switch to a fixed-rate loan for long-term monthly payment predictability.
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Increased debt: If your financial position changes, like a job loss or serious illness, this could be very risky for your financial wellbeing.
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Risk of foreclosure: Because your home is the collateral for the loan, if you cannot make your payments, you could lose your home.
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Reduce home equity: By taking cash out, you are using up all or much of the home’ s equity you have built up over time.
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Longer repayment term: When you extend the term of the loan and take equity out of your home, you are extending the term (length) of the mortgage meaning you’ll pay more interest for the loan.
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Closing costs: When you refinance the loan, you will be required to pay closing costs and this can be a great deal of money.
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Reduced credit score: When you take your home’s equity and refinance, your overall debt / liability increases and this might lower your credit score.
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Flexible use of cash/equity: The cash equity that you take out of your home can be used for anything you want. It can be used for a child’s college education, to pay off debt, or whatever you deem important.
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Single monthly payment: Here you are consolidating your mortgage and the cash-out refinance into one single monthly payment.
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Possible tax benefits: Consult your tax professional because interest paid may be tax deductible.
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Access to a large sum of money: If you have good equity in your home, it can provide the borrower with a significant amount of cash.
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Potentially lower interest rate: A mortgage refinance is typically a lower interest rate than that of credit cards, revolving debt, or personal loans. If you utilize you home’s equity to pay off higher debt (debt consolidation) it can save you money from a decrease in your overall financial interest rate.
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If you need a home improvement or renovation that will increase the value of your property.
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If you have higher-interest rate debt that can be consolidated into a lower interest rate overall thus saving you money
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Your financial situation has significantly improved , helping your qualify for a better term and rate of interest.
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If you can keep at least 20% of the equity in your home, after taking cash out, thus enabling you to avoid owing an PMI (personal mortgage insurance).
- A credit score of at least 640. The higher your FICO® credit score, the better interest rate you will get.
- Overall, a debt to income (DTI) ratio that does not exceed 40%.
- A Loan-to-Value (LTV) Ratio that does not exceed 80% of the home’s value
- Proof of good stable income that enables you to make the monthly payments.
- At least two (2) years of consistent employment.
- The property type may be a primary home, secondary home, or investment property.
- No late payments in the last twelve (12) months.
- A current appraisal on your home.
- At least 12 months of home ownership.
A cash-out refinance replaces your current mortgage, changes the terms of your first mortgage, gives you access to the cash equity in your home, and can potentially offer a lower rate of interest.
A HELOC is a second mortgage with a fixed interest rate and term. A HELOC offers revolving credit with variable rates (normally adjusted quarterly) and flexible payments during a draw period which you access funds. It is good for ongoing costs or if you need flexibility in borrowing the funds.
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The staff at DATCU has always been kind and helpful to me in every interaction over the past 24–30 years I have been a member. I appreciate them so much. Thank you!
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