Dallas Home Mortgage Assistance

You’ve no doubt read many times in many different places that refinancing a Dallas mortgage at today’s low mortgage rates could possibly save you a lot of money. It’s very typical to look at your existing interest rate, compare it to the new rates, and be happy calculating the extra cash you’ll have every month with a new mortgage. Unfortunately, it is very common for this extra money to never really seem to make it to the point of affecting your life in any real, meaningful way. With all of your everyday expenses, it’s just way too easy for this new found cash to get re-distributed without making any real, significant impact for you. This article will describe the true potential power of those savings to you. It is true that it will require some financial discipline from you, but the hope is that when you see what the outcome could be, you’ll find it to be worth your while.

We need some numbers to work with, so we’ll assume that you’re new Dallas mortgage is a 30 year, fixed rate mortgage. With this new mortgage, let’s just say that you’re now paying $175 less each month. A good amount of extra money to have every month, but what are you going to do with it?

One option that we discussed in a previous example was paying off other debts, such as those on existing credit cards. As a reminder, in that example we said there were two cards, one with an $8,000 balance at 12% and the other at $4,000 balance at 16%. We showed that if you had been making just above the minimum monthly payments before, the pay-off would take 23 years. On the other hand, if you were to use your monthly savings to pay those debts, you could reduce the total pay-back period from 23 years to about 4 years, saving you a LOT of money.

Another option for the money would be to apply it towards the principle on your new Dallas mortgage. If you were to do this you could dramatically shorten the amount of time it takes you to pay off your mortgage and again, save you an awful lot of money. How much could you save? OK, let’s have a look at some possibilities.

Again, for the sake of argument, we’ll use the following example. We’re going to say that your new mortgage is for $225,000 on a 30 year program at a fixed rate of 5%. If you were to apply that $175 savings each and every month towards the principle balance, you would be able to pay off your loan over 7 years early saving more than $58,000 in interest payments! That is some serious savings!

So, the idea of refinancing to a lower rate is very appealing for many people. However, the thing that often gets overlooked is how significant a difference a small change in your Dallas mortgage rates can have on your long term net worth. As we’ve all seen in the current economic situation we find ourselves in, a bit of us.

Regardless of whether you’re considering a Dallas refinance or if you’re considering getting a purchase money loan, it’s worthwhile to take a moment to realize what small but regular efforts can make on the big picture of your financial situation.