Houston Refinance: Leverage Your Cash Out Loans

Houston Refinance: Leverage Your Cash Out Loans

Contact me, Frank Zhu, and let me help you find the lowest rate in Texas when it comes to mortgage. I’m bilingual in English and Chinese. Give me a call at 512-919-0154 for your mortgage needs.

I was talking with a client who wanted to just refinance his home to get a better rate. As I was talking with him more, I found out that he really was trying to save money monthly and he had a second mortgage as well. Well, I suggested to him that he should do a cash out loan instead. It is only 0.125% to 0.25% higher than a rate and term refinance. In addition, he had a $20,000 credit card debt he needed to pay off anyways. So instead of him just refinancing his first loan $90,000, we added up all of his debt together as well as the second lien to about $180,000. This way he will be enjoying the low mortgage rates while paying off other high interest debts.

He has a second mortgage at 7.5% rate. With a cash out loan, while the rate increased by 0.25% to 4.25% for a 15 years fixed, he is still saving 3.25% every month as well as interest over the long term. In addition, he is currently paying $400 a month from the credit card debt. By adding an additional $20,000 to the cash out loan, the monthly mortgage rose only by $167. So he is actually saving $237 a month by taking out that $20,000 extra cash to pay off the credit card debt. In the end, even though he is taking out a bigger loan that what he had planned originally, he was actually saving a whole lot more money this way than if he had just refinance his first mortgage.

If you have any additional debt that has a high interest, consider this alternative to lower your monthly payment. Not only will this save you money monthly, but it will save you money on interest in the long run.

We also offer “no cost” refinance. Contact me, Frank Zhu, and let me help you find the lowest rate in Texas when it comes to your mortgage. I’m bilingual in English and Chinese. Give me a call at 512-919-0154 for your mortgage needs.

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