what are the drawbacks of refi mortg. & HE loan in Texas?

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Help! Interest rates are lower and I would like to refinance My Mortgage of 5.625 of $65,000 taken out in 2002. and Home Equity Loan of $53,000 at 6.1. The Home equity loan was not taken at the time of purchase. I was Injured and needed the money and am still disabled but my husband works. I do not understand the implications or drawbacks of turning my current mortgage into a permanant "Cash-out or Home equity? I can't seem to get an unbiased or educated answer. I am told I would have to pay closing cost in the thousands(pay two points) ect..to get the current 4.75 all at 30 yr. I have no current plans for selling in the next 5 years and the Home Equity was taken out in 2003. Over the period of the loan or even in 5 years would it be worth the refi. expense? We purchased the house in 2000 for $185,500. The mortgage lender is saying we need to hurry because interest rate may be changing. I am confused.

jenkin7 · Posted: Tue Sep 15, 2009 12:20 am Post subject:

Hi Jade,

The current interest rates on the fixed rate mortgages are quite low and it is a good time to refinance the existing loans. However, you should rush things while refinancing. Take your time and think about it before taking a decision. Since you do not plan to leave the property in near future, I believe refinancing the loans into lower rate will be a good idea.

In Texas, article 50 (a) (6) law applies to cash-out refinances and home equity loans. If you already have a Texas a6 loan, you can refinance it only with another Texas a6 cash-out or home equity loan. The Texas a6 law does not allow a borrower to cash-out more than 80% of the value of the home.

Nevertheless, since the mortgage interest rates are going quite low, I think this is the best time to refinance the loans, if you want to. The rates can go up towards the end of 2009 and early 2010. Thus, if you have decided to refinance, you should start contacting lenders and shopping for a suitable loan. You can also go for a no-obligation free mortgage consultation with the lenders in this community. They will assess your financial situation and other required factors and offer you suggestions on the type of loan you can qualify for.

Guest

Thanks for yor help!!

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