Dallas Refinance Guide

Everywhere you turn you can read about the fact that Dallas mortgage rates are at historic lows and that now is a great time to refinance. And when you stop to consider all the effort that is going into creating new programs for struggling home owners, even if you have the feeling that you wouldn’t qualify for a Dallas refinance right at this moment, it wouldn’t hurt to just talk to a mortgage professional to learn more. You never know, you might be pleasantly surprised.

After you’ve figured out that it makes sense for you to refinance of your existing Dallas home loan, the next thing you might want to consider is what to do with the money you’ll be saving. That may sound like a silly question, but trust me, if you’re not careful it is very easy for that extra money to just ‘evaporate’ at the end of each month and not really have much impact on your situation.

In previous articles two different suggestions were made for what someone might want to do with their new found savings. In each situation we used the same hypothetical savings of $175 per month from your new refinanced Dallas home loan. While that much money is nothing to sneeze at, it’s probably not going to get many people overly excited either. However, we showed how a bit of discipline could turn that modest amount of money into some serious benefits.

In our first example applied the money to pay off existing credit card debts. As an example we used 2 cards with balances of $4000 and $8000 and interest rates of 16% and 12% respectively. We applied the extra $175 to the minimum required payment to show that we could pay them off in about 4 years as opposed to the twenty-three years it would take paying just over minimum monthly payments.

In example number 2 we took the savings and applied it towards the principle on your Dallas mortgage to help pay it off more quickly. Our example was of a loan amount of $225,000 at 5% fixed. By applying our extra cash to the principle each month, we reduced the time to pay off the mortgage by over 7 years. That equal over $58,000 in interest you wouldn’t be paying.

The last option we will talk about is putting that money to work by investing it. The investment goals could be anything from your retirement to a vacation to a child or grand child’s college expenses. Your investment motivations are completely your own; we simply want to show you what could be accomplished with this money.

We’ll need to use some ‘guesstimates’ in this calculation, but we’ll use conservative numbers to be on the safe side.

Let’s say that you start of with $2000 in an investment account and you’re going to add that $175 to it each month for the next 18 years (working on a college fund for a new baby). We’re going to use a conservative annual rate of return of 7% for this example.

So what does baby have waiting when they turn 18? A bit over $83,000! That’s a pretty good start for college, I would say.

Let’s say that instead of college for a child, you’re a 30 year old looking to retire at age 65. Let’s also say that this account is starting with ZERO balance, but gets the $175 every month, compounding at a conservative rate of 7% annually. Given this situation, if you did nothing else for your retirement, by the time you were 65 years old this account would have over $300,000 in it. Once again, this is a pretty impressive sum considering we’re using conservative numbers.

You need to remember of course that these figures are all hypothetical. However, if they whet your appetite at all, you should definitely consider sitting down with not only a professional mortgage advisor to see about refinancing your Dallas home loan, but also with a financial planner and/or an accountant.

The main point that we hope you get here is that while some savings may appear to be rather insignificant at first, if you apply yourself properly, you can have a dramatic positive effect on your long term financial well being. Your Dallas home mortgage is more than a bill; it should be part of your overall financial plan.