Refinancing Your Home Mortgage, the time is now… or is it?

(Last Updated On: October 16, 2014)

Refinancing Your Home Mortgage in the Woodlands Texas… timing is everything

refinancing your home mortgage in the woodlands texasYou see it every day the sales pitches from the Mortgage Industry of “refinance now”, “new lower rates can save you thousands” or even ones that say “If I could put $100 each month in your pocket could I help you?”  All of these phrases and others are true to a point however none of them or the mentality behind them answer the question of should you refinance today?

When is the best time for refinancing your home mortgage in The Woodlands Texas?

To answer the question if when is the best time of year to refinancing your home mortgage in The Woodlands Texas it is December and January.  You should start the process at least 30-days before this and this applies to FHA Refinances, VA Refinances, Conventional Refinances and USDA Refinances and streamline refinances to all of these home loans too.  If it benefits you then anytime is good, however the timing can make a big difference too when you are refinancing your home mortgage.

Why are December and January the best time for to refinance in the Woodlands, Texas?

Questions About Home Mortgages (150 x 100)This is because tax bills in Texas for the current year are generally due on the 1st of December.  Why is this significant?  Because your current Mortgage Company will generally pay your taxes on or about that date.   Since most people have the mortgage company collect their taxes and insurance with their monthly payment in an escrow account. As with most things in life, successful money management included, timing is everything.   If you do not escrow or will not escrow in your new loan then jump here for an explanation of how the timing works in that situation.

All things being equal the timing of the refinancing your home mortgage is key to saving thousands in interest over the life of the loan because you won’t have to roll in thousands in taxes and insurance into your new loan or won’t have to bring thousands to closing that you don’t have.  This is all about saving money right?

As you can see in this chart below the later in the year you refinance then the larger the amount you have to bring or roll into closing for your taxes or and insurance.  As a service to our clients we offer a free custom, no-application, no credit check analysis to see if it is in you and your family’s best interest to refinance just call or email us.  We just need your current mortgage statement to get started.

Refinance Escrow Amounts

Closing MonthBorrower’s First Payment Month# Of Months Of Tax Escrow To Collect At Closing
JanuaryMarch4 Months
FebruaryApril5 Months
MarchMay6 Months
AprilJune7 Months
MayJuly8 Months
JuneAugust9 Months
JulySeptember10 Months
AugustOctober11 Months
SeptemberNovember12 Months
OctoberDecember13 Months
NovemberJanuary14 Months
DecemberFebruary3 Months ***
***If your current mortgage company has paid your taxes by December 1st AND we can get proof paid from the county. In Texas Most real estate Taxes are due on the 1st of December

Other Benefits of Refinancing Your Home Mortgage in the Woodlands Texas

The first benefit of refinancing is obviously that you would lower your monthly payments this is a pretty straight forward proposition.  However, by adding in additional fees and expense you may not be better off financially.  Sure you are saving on your monthly payments but if it costs you 7 to 10-years to recoup the expense through the savings that you receive by refinancing then that may not be the best option for you and your family.

The second Benefit is that in some cases you can refinance and pay off the loan sooner for the same monthly payment or less than you are now.  That way you are not resetting the clock to 30-years.  We often recommend to clients a shorter term such as 10, 15, 20 or 25-years while making the same payment that they are now or less.  Thus saving 10s or $1,000s in interest.

The third while not a benefit and cannot be used to justify a refinance that is that by doing a refinance you may also skip a payment.  You can use this extra money for the holidays or pay that credit card down a bit.  It’s all up to you.  As a service to our clients we offer a free custom, no-application, no credit check analysis to see if it is in you and your family’s best interest to refinance just call or email us.  We just need your current mortgage statement to get started.

The dirty little insider secret of refinancing your home mortgage that Mortgage Industry won’t tell you

Home Loan Issues

It’s not about you and your family’s best interest, but money.  Now this may sound a little strange coming from someone who makes money by helping people with their mortgage needs for a living.  However being a Mortgage Originator we also have a fiduciary responsibility to you, our clients, to act in a trusted and ethical manner and prudently recommend real estate financing options that are in you and your family’s best interest even at the cost of ourselves.  In the end we would rather have you as a client for life than to do a one time quick and dirty loan that you don’t need and can hurt you financially down the road. As a service to our clients we offer a free custom, no-application, no credit check analysis to see if it is in you and your family’s best interest to refinance just call or email us.  We just need your current mortgage statement to get started.

For those refinancing your home mortgage and do not escrow their taxes and insurance

If you are not excrowing the later in the year you go you may have to pay all of the taxes to that date into a one-time escrow so the lender will be assured that the taxes will be paid and if you are within 90 days of your insurance renewal then you may also be required to pay your insurance annual premium.  Call us and we can assist you in determining which applies in your situation.

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