Refinancing Jumbo Loan Dallas Texas: The Dallas-Fort Worth metroplex, which includes 12 counties, has an approximate population of more than 7 million and is growing. That means the appetite for new and existing housing is still strong and is especially so for the luxury housing market.
Luxury homes in this 12-county area are those that appraise for more than $766,550, the conforming loan limit. Anything greater than this amount is considered a jumbo loan. And jumbo borrowers like any other, have the ability to refinance their existing jumbo mortgage. Yet even though you can refinance a jumbo loan, when do you know it’s time to refinance a jumbo loan here in the greater Dallas area?
There are three primary reasons to refinance a jumbo loan- to lower the monthly payment, change loan terms and switch from one loan type to another, usually getting out of an adjustable rate ARM and locking in a low fixed rate mortgage.
Rates don’t have to fall a particular amount in order for a refinance to make sense. Instead, consider the difference in monthly payments with the costs associated with refinancing a jumbo loan. For example, if refinancing a jumbo loan reduces your mortgage payment by $500 and closing costs are $5,000, it will take about 10 months to benefit from the lower payment.
If you intend to keep the mortgage for at least 10 months in this example, it makes sense to refinance. If the benefit doesn’t come around until after five or six years, it might be better to stand pat. In addition, if you’re several years into your loan, changing from one 30-year loan to another 30-year means you’ve lost the interest paid on the existing loan and extending your loan term out a fresh new 30 years.
But a refinance can also make sense when shortening the term of your loan. Let’s say you’re five years into your 30 year fixed rate loan and rates have dropped. You can refinance to a 15-year fixed, a 20 or a 25-year loan term. A shorter loan term will bring higher monthly payments but the long-term interest savings can be considerable.
Finally, it can make sense to get out of a hybrid adjustable rate loan and into a fixed. Let’s say you own a home in Texas you bought three years ago and took out a hybrid 3/1 jumbo home loan. The loan is getting ready to turn into an annually adjustable rate loan and you find that 15-year fixed rates are very attractive. In this situation, you can benefit from refinancing your jumbo loan getting out of the uncertainty of an adjustable-rate mortgage and into the stability of a fixed.
The point here is that a jumbo refinance isn’t all just about the interest rate. There are other important factors that are often overlooked, especially with jumbo mortgages. Why? Because even a slight move in jumbo rates can have a more significant impact compared with smaller loan types due to the differences between monthly savings and closing costs. Bigger loan amounts can yield greater savings on a monthly payment compared to a non-jumbo loan.
Your loan officer can run different scenarios for you and provide guidance regarding whether refinancing your jumbo loan makes sense. Jumbo Mortgage Source offers a variety of refinancing options up to 95% loan to value. Also be sure to check into our cash-out refinance options for those that have significant equity and want to cash out for other investments, etc.
Learn more about all the jumbo refinance FAQ here. Contact us by calling ph: 800-962-0677 or just submit the Quick Contact form on this page.
Serving homeowners all across the nation for both refinance and purchase, including Texas: Houston, Dallas, Austin, San Antonio, Midland, Galveston, El Paso, Fort Worth
