Owning a house is a major financial commitment. Sometimes, you may need a change and maybe you are ready for it. But, you may not be sure about how much change. Apart from that, if you refinance your home from mortgage lenders, you can get a new mortgage that will have better terms and rates. You can also void the hassle of moving homes. On the other hand, maybe you may be considering purchasing a new house and getting fresh scenery in front of your eyes best mortgage rates.
The option of whether you must refinance your house or buy a new one depends on your situation. Below mentioned are the factors you must consider when choosing between either two –
Should you refinance your house or buy a new one?
Most people have trouble when choosing between either two. It is important to weigh the pros and cons and make informed decisions. Generally speaking, both these options can be beneficial in their ways.
Reasons to purchase a new house:
When you feel that it is time for you to shift to an entirely new location, it can be worth buying a new house instead of refinancing your current house. Let us look at the benefits of purchasing a new house –
- You will get a great deal on the mortgages from lenders in Texas. The lower interest rates and good credit score can be in your favor.
- Because of the lower interest rates, you can buy a house easily.
- You will buy a house that meets your current needs well.
- Buying a new house will save you ample time over remodeling your current home
- You can move to areas that have better schools
- You can move to a new area that fits your current lifestyle and needs
Apart from that, there are other ways of saving money even in the seller’s market. Sellers’ market can be a great time to sell the current house if you have outgrown the one you currently are living in. if you feel ready to buy a home, the best time to start hunting for it is right now.
Reasons to refinance a house:
Mortgage refinance can be one of the smartest money moves because of so many benefits that it comes with. They are as follows:
- Better interest rates that help you save dollars in the long run
- Lower per month mortgage payments
- Removes mortgage insurance
- You can get a shorter term and pay the mortgage faster on your Texas home loan
- You can get into a low fixed mortgage rate and get out of the adjustable one
- Pull the cash out of the home’s equity with the help of cash-out refinance.
In plenty of cases, refinancing the house can help you save a lot of money and you can pay off your mortgage faster. However, you must keep in mind that for refinancing the house, you need to have a good credit score if you are trying for a better interest rate. Refinancing can be beneficial for you when the interest rates are low and that reduces your mortgage payments. You can also save thousands of dollars throughout the life of your loan. You also have the option of switching to a fixed-rate mortgage so that you lock down the low rate of interest over the life of your loan.
Here is your complete guide for refinancing.
Will refinancing affect buying a new house?
If you plan to live in your new house, then refinancing can affect your purchase. In certain cases, you must live in your primary residence for a period of 6 to 12 months, based on your loan program after refinancing that house as your primary residence.
If you do not plan to move into the new house instantly after you have purchased it, you can refinance your current home as a primary residence. However, you will have to make sure that you are qualified for refinancing your current mortgage.
Does refinancing and getting a new mortgage mean the same thing?
When you choose to refinance your house, you are technically getting a new mortgage to repay the old one. However, refinancing does not work the same way as you would apply for a new loan for buying a new house. The closing costs can be rolled into the new loan for transactions related to refinancing. You also do not have to pay a down payment for refinancing. Because this “out of the pocket” money is lower on refinance, you can easily qualify for one. Your loan application process will vary based on your current loan program.
Whether you are ready to refinance your home or buy a new one, get in touch with the mortgage lenders in Texas. You can talk to the professionals if you have further queries related to refinancing or buying a new house as they will be happy to help you.