Over the past thirty years, Dallas mortgage interest rates have risen and fallen massively in a financial tide of mortgage offerings. Early on in the 1980’s for example, interest rates for normal 30 year, fixed rate mortgages were in the neighborhood 18 percent. Today, though, we’re seeing interest rates for the very same type of mortgage loan about five percent – and even sometimes, in the 4% range.

Numerous Dallas home owners who bought their homes when interest rates were significantly higher are now seriously thinking about a Dallas refinance so as to reap the benefit of the lower rates of today. If you’re one of these folks, know that there are some expenses involved in refinancing your mortgage, such as having your home appraised, title insurance, and a mortgage origination fee, just to name some. To calculate if these expenses will off set with the possible money you may be able to save by refinancing your loan, you can use the basic rule of thumb called the 2 percent rule.

In basic English, this rule recommends that the difference in percentage between your current rate on your mortgage and the new interest rate being offered should be at least two points. If you were among those those who borrowed in the ’80’s who receiveda mortgage with a rate in the double digits (and today you can get a rate around 5%), it would make very good sense to refinance.

Listed below are 3 advantages why people are refinancing in Dallas to a lower rate:

1) Lowering monthly payments – By reducing the interest rate of your Dallas mortgage, you will be able to see a major difference in your monthly mortgage payment. And, every little piece adds up. Some people who refinance have saved $1,000’s of dollars over the life of their loan period. How much you will personally save, though, totally relies on your specific situation. So, make certain to talk to a mortgage adviser who is qualified to do the number crunching for you to determine how much you will be able to save by refinancing.

2) Altering the kind of loan you have – Some people choose to refinance in Dallas even though they won’t save any cash by doing so. Think of the many borrowers who got an ARM (Adjustable Rate Mortgage). We are seeing many of these borrowers refinancing just to change to the fixed rate mortgage. At the same time, some borrowers who have a balloon payment worked into their loan are choosing to refinance as it gets nearer to the date to make that balloon payment.

3) Pulling money from your home equity – If you’ve been in your house for 10 or more years, there’s a better than average chance you have a significant bit of equity because of the overall Dallas home appreciation (even with the existing dip in house values) and to the fact that you’ve made those payments every month for quite a while. Because of this, some homeowners decide to withdraw value out when they refinance their mortgage loan so as to aide with such things as retirement or with their kids’ costs for college.

If you’re thinking about refinancing a Dallas mortgage, make certain to talk to a qualified home loan professional – someone experienced in refinancing who can talk to you and go over your numbers and the the various options you have. And know, that each situation is unique. Your local Dallas home mortgage specialist should ask you about short-term and long term benefits (or consequences) that are unique to you and targeted towards your personal financial future.

No matter what your goals are, with today’s rates you should absolutely have a closer look to decide if a Dallas refinance makes financial sense for you.