When is Refinancing Worth It?

The refinance market is booming with homeowners taking advantage of record low interest rates. However, millions of homeowners are passing on the opportunity to save money by refinancing their current home mortgage. Many of those mortgage holders are just not sure if refinancing is worth it.

The Pros And Cons

Refinancing is replacing a current mortgage with a new one. The new mortgage loan pays off the old one, and the homeowner is then responsible for paying the new mortgage. There are significant time and costs associated with refinancing. It can save a homeowner money or cost money.

“Any determination of whether a borrower should refinance is dependent on whether or not the transaction creates a tangible benefit,” says loan officer Alison Hannah, Vice President of IberiaBank.

Do The Math – Consider The Fees

Closing costs are an important factor in deciding whether to refinance. Like an original mortgage, refinancing requires a title search, credit report, appraisal, application fees, recording fees, tax certificate, and title insurance. Costs can also include an origination fee, processing fees, and more. Refinance fees and closing costs can add up depending on the loan amount, discount points you may buy, and what the lender charges.

Total closing costs typically amount to 2 to 6% of the new loan amount. According to Freddie Mac, the average closing costs on a mortgage refinance are $5,000.

In December 2020, the Federal Housing Finance Agency plans to add in a refinance fee of 0.5 percent of the loan amount to all refinance loans sold to the government-supported entities Fannie Mae or Freddie Mac. That accounts for about 70% of all U.S. mortgage loans.

A lower interest rate might not be worth it if your savings are consumed by fees and closing costs.

How much should mortgage rates fall before you think of refinancing?

Many experts recommend refinancing when it would reduce an owner’s interest rate by 1 percent or more. Every refinance has a break-even point. That is a point in time where your refinance pays for itself.

“The cost to refinance must be recovered via the reduced payment in a short enough period of time so as to make sense with respect to the borrower’s holding period,” advises Hannah.

To determine this, divide your mortgage closing costs by the monthly savings of your new mortgage. If you are paying $5,000 in closing costs and will save $200 per month because of refinancing, it will take 25 months to break even.

Break-Even Period on a 30-Year Mortgage

Use a mortgage refinance calculator to enter your current interest rate, monthly payment, and your new loan terms and calculate how the two mortgages would compare. If you do not plan to keep your home past the break-even point, it does not make sense to refinance.

Every homeowner’s financial needs and goals are different. A 1 percent interest rate decrease may offer significant savings on a $1 million mortgage but not make financial sense for a $100,000 mortgage.

Getting a Mortgage Can be Complicated

The refinance activity this fall has been a rollercoaster pattern of increased refinance application volume followed by a dip in requests. Forbes Advisor published a survey in October 2020 stating that about 32.4 million homeowners have a home loan with a 0.75 percent higher rate than today’s average mortgage rate. That represents about three out of every four mortgage holders with a 30-year mortgage.

Not all of those homeowners are eligible to refinance due to their income, employment, credit scores or home value. However, there are millions of qualified homeowners who could save hundreds of dollars a month on their house payments. So why isn’t everyone doing it?

Many homeowners do not want to go through the hassle and the paperwork that refinancing requires. The process can be daunting and not everyone is prepared or willing to jump through the hoops. They forget that the lender is handing over a big sum of money and even the most loyal clients carry a risk for repayment. Be prepared for the significant time and effort involved in refinancing.

Do Your Homework

When it comes to interest rates and closing costs, mortgage lenders take into account credit score, income, assets, loan amount, and property value.

Know your credit scores since they affect your interest rate. The higher your credit score, the lower the interest rate. Many lenders recommend a credit score of at least 720 to qualify for the most competitive rates. Consider taking steps to improve your scores before refinancing.

If you are unsure about refinancing, choose a knowledgeable mortgage lender who can help you decide. Know what costs to expect and whether it makes financial sense for your situation.  [where: 75230]

The Anatomy of a Real Estate Closing

The closing process varies and fluctuates from property to property, from state to state, from person to person. Just like homes are different, so are closings on those homes.

However, real estate closings in Texas follow a consistent outline of steps from start to finish. They don’t always follow a straight path. Some steps are rigid requirements while others are more flexible guidelines. Some of the steps take place simultaneously while other steps cannot be taken until a previous task is completed. Some steps are short and others are long and complicated.

From the time you complete your sales contract until the title transfers between owners, here are the basic steps of a Texas Real Estate Closing:

• Contract – The signed, completed and executed contract is delivered to the title company by the agents.
• Earnest money – The amount specified in the contract is deposited with the title company specified on the contract.
• Inspections – Buyer does their due diligence and conducts inspections of the property before the option period ends.
• Information exchange – Title company, buyer, seller, and mortgage company exchange information needed for the sale.
• Title search – Title company researches property records and more.
• Mortgage company – Buyer secures their lender and has their loan approved.
• HOA resale certificate – If there is a homeowners association, the resale certificate and rules and restriction documents are ordered and delivered to all parties.
• Appraisal – A professional appraisal of the property is performed if required or desired.
• Survey – An existing survey is supplied by the seller and approved by the title company or a new survey is done.
• Title documents – The title commitment, tax certificate, property restrictions, etc. are delivered to the buyer and their lender for review.
• Contingencies removed – Contingencies to the contract in addition to issues on the title are addressed and removed.
• Get clear to close – The go-ahead to close the sale, given by both lender and title company.
• Schedule closing – Time set up to sign closing documents.
• Final walk through – buyer takes a final look at the property to confirm condition and acceptance.
• Signing – Buyers and sellers sign documents to consummate the closing.
• Fund – after all documents are signed, reviewed and approved, lender sends funds to the title company who then disburses funds to all parties.
• Get keys and possession – after funds are processed, buyer gets keys to property.
• Deed recorded, records filed – Title company files the deed(s) in court records and records the transaction.
• Title insurance policy issued – Title company issues a title insurance policy to buyer/lender.

The nice neat drawing provided at the top of this story represents the process from the beginning to the end of the sale. However, this graphic shows a more realistic view of how it all happens.

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Liens and Titles and Deeds, Oh My

I've got a new column on Candy's Dirt. check it out -

Liens and Titles and Deeds, Oh My

I’m Lydia Blair (formerly Lydia Player) and I bring more than a dozen years of real estate experience to the CandysDirt.com team. When it comes to the title business, I’ve been down the closing path many (many, many, …) times. However, I’m not an attorney. And I don’t play one on TV – or anywhere else. So, you won’t just get the inside scoop from me. Each week we’ll go straight to the experts, the best title minds in the Texas title business to answer your questions and shine some light on the inner workings of the industry. Got questions? Fire away! Lydia@candysdirt.com.

To kick off this first column, I’ve got dirt.

I’m off at the 27^th annual Texas Land Title Institute in San Antonio this week, where I’ll bring you all the latest news. This year’s sold out conference includes Dawn Moore of Allegiance Title in Dallas, speaking about a topic we all love to hate: homeowners associations or HOA’s. Dallas’ Paul McNutt of Title Resources Guaranty Company will be teaching a doc prep class on survey issues. Registered Dallas folks at the conference include Steve Holley with Republic Title, Tracy McMahon of Capital Title, Joe Theriot with Lawyers Title, Bill Woodall of Chicago Title, along with several DFW professionals and attornies who will be instructing,

We may skip the specifics of the Home Equity Lending class – yawn. But you can be sure, I’ll relay any important details about the new Power of Attorney rules and how the industry expects the remote closing process to make waves in the next year. Just as real estate brokerages, mortgage companies and the entire real estate industry is undergoing changes, so is the title business. The changes we’ll be hearing about this week will be sure to have a ripple effect that will be felt by Realtors, buyers and sellers. We’ll see what the experts say about how strong and fast those waves of change will be hitting us.

On a lighter note – If you’re wondering how the conventioneers of a title industry event like to have fun, oh baby. Look for my boots-on-the-ground report from the “Parties in Possession” class. It could be entertaining, and I promise to keep the boots on!

Liens and Titles and Deeds, Oh My

Moving from Dallas Realtor to Title Rep

After 10 years of success in Dallas residential sales, I’ve decided to move into the title company business. I’m delighted to be the new Director of Marketing and Development for Texas Premier Title located in Preston Center. It’s an exciting career change that has taken a lot of consideration. I’ll be working with some of the top professionals in the business and my marketing background fits right in to this position.

Texas Premier Title is an independently owned company with 9 locations in the Dallas area. Their strong relationship with the Ebby companies will provide a seamless transition for me. I’m eager to joining a successful team with many years of industry experience.

While I will no longer be selling residential real estate, I will continue my relationships with a strong network of agents from brokerages all over the Dallas area. I can gladly refer home buyers and sellers to the best Realtors in Dallas.

If you are looking for a condo near the Katy Trail, a ranch with a horse arena, an estate in Preston Hollow, a cottage in the M streets … I can refer you to an agent who is an expert and can meet your needs. And for anyone thinking of selling a property, I’m happy to say that I know a lot of great, well respected Realtors who I can recommend.
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Available Home Inventory rises in North Dallas

The number of homes available for sale has increase in the last couple of weeks. However, North Dallas is still in a strong seller's market.

We currently have almost a 6 month supply of properties (homes, condos, townhomes ) for sale from the Park Cities to LBJ Freeway (and between Central Expressway and Stemmons Freeway). That's 647 properties on the market as of this morning.

In April this year we had only a 2 month inventory of homes for sale. There were 565 homes available for sale. Doesn't look like a big difference in numbers, but the demand was slightly higher and homes were selling incredibly fast.

A 6 month or less supply of homes for sale indicates a seller's market with demand outpacing supply. An 8 month or more supply of homes indicates a buyer's market.

"Inventory" is figured by looking at how long it would take to sell all the homes on the market if no other properties were listed for sale. If 100 homes sold in the past year and there are currently 50 homes on the market, then you have a 6 month inventory. If 100 homes sold and you have 200 on the market, you have a 2 year inventory. Just a few years ago some of our neighborhoods had that - and more.

Folks are moving to Dallas from all over the place and this is the busy season for real estate sales. If you've got a home to sell, now is the best time to have it on the market. [where: 75230]

The Best Dallas Home Search Mobile App - easy, all-inclusive & free

Searching for Dallas homes for sale is now easier than ever.

Check out this app that provides information the natural way starting with a map, not a menu. It's free and perfect for buyers on the go.

There are 4 easy ways to search:

1. Journey Search: This feature shows available properties as you drive through a neighborhood. You can immediately view property details and photos.
2. Perimeter Search: This feature allows you to draw boundaries on the map view with a finger.
3. Scope Search: Aim the phone camera down a street and this innovative augmented-reality search displays available homes. Select any of the properties for details and pictures.
4. Address Search: Just type in the address for facts and photos of the home.

To download this app on your smartphone or tablet, just click here.

Or copy this link: http://www.ebby.com/go_mobile/116426?code=lydiaplayer

Follow the simple instructions to press and hold the number code.

Then click copy and click Download App (you may need to login to your iTunes).

Click on Open. Allow location access, so the map function will work.

This only works on a moble device (not a desktop or laptop computer). Available to iPhone and Android users, this real estate app provides a user-friendly way to instantly find homes for sale and open houses.
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Oh Hail! Beware Dallas Roofing Scams

It's spring storm season in Dallas and hail damaging your roof is always a possibility. But beware of scammers posing as legitimate roofers. After the storm passes, these gypsy roofers flock to our neighborhoods offering their services. You'll find loads of fliers and "contractors" knocking at your door to solicit business.

Here are few tips to avoid getting ripped off:

1. If they come to you - knocking on your door - don't use them. Trustworthy roofers are busy after a storm. They don’t have time to solicit business door to door. They’re too busy with work that was referred by satisfied customers. Often these so called "gypsy roofers" will show up at your door posing as a legitimate roofing company. They'll offer an estimate and ask you for a deposit. You'll never see them or your money again.

2. Get a local address and references. Hire an established roofer with roots in the community and a stake in maintaining a good reputation. If they aren't local, don't use them. 

3. Never, ever, ever pay a deposit immediately. Gypsy roofers want deposits up front and contracts signed now. I know it seems logical that a roofer needs a deposit to buy the materials to get started. But an honest roofer isn’t afraid to leave and give you time to think and make an educated choice. An established roofer doesn’t mind starting a job using company money and has funds to buy materials without your help. A roofer confident in his skill wants you to compare his quote and work to others. 

4. Don't let just anyone inspect your roof. Avoid unsolicited estimates and give the insurance adjuster a chance to be the first one to examine your roof for damage. Take photos before anyone examines it. A common scam by storm-chasing roofers is to deliberately cause more damage. When a disreputable contractors gets on the roof before the insurance adjuster, they may use a small objects to cause all kinds of damage. When the adjuster looks at it, the estimate of damage is inflated, allowing the roofer to earn more from the job than he might have otherwise.

5. Don't let a door to door solicitor inside your house. But also be aware that they could be working in teams with one keeping  you busy outside talking about your roof while the other sneaks in and robs you. 

Texas has one of the highest rates of fraud in the roofing repair industry. It is mostly due to a lack of state regulation over roofing contractors. They are not required to be licensed like plumbers and electricians and this allows gypsy, drive-by and storm-chaser roofers. They know full well that insurance adjusters are following close behind after a big storm.

Watch out for them and help warn our elderly neighbors since they tend to be easy targets for these scammers.
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Preston Royal Community Garage Sale this Saturday

Have stuff to sell but don't want to host your own garage sale?

Why not do a little spring cleaning and make a little money for yourself?

This Saturday is your chance. For $25, you'll get a 6 foot table and 2 chairs for the garage sale at 5923 Royal Lane. You get to keep your profits. The property is located on the north side of Royal, just east of Preston.

This community garage sale is this Saturday, Apr 25 from 8:00 until 3:00. Contact Jane at 214-789-9787 to reserve a table or for more details.
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How tight is the North Dallas Real Estate market?

Here's a quick look at the current residential market from the Park Cities to North Dallas (south of LBJ).

In this area, we've had 494 properties offered for sale since January 1st. That's down considerably over the past few years. The average asking price this year is $1,437,137. And that is up considerably.

How tight does that make our market? Extremely would be a good word to describe it. We (real estate economic experts and I) expect this trend to continue for the entire year.
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Should you Sell with a Realtor who Specializes?

All real estate agents are not created equal. Realtors who concentrate in a specialized area of expertise sell homes for more than other agents according to a study published by the Journal of Real Estate Finance and Economics.

Some Realtors specialize in a localized neighborhood. Others focus on architectural styles (like modern or historical) or property type (like condos or ranches). And there are a few with expertise in probate sales, vacation homes, distressed properties, etc.

Those agents who specialize sold homes for an average of 1.21% more than other agents. Those homes are also more likely to sell and to sell quicker. The study indicated agents who specialized became more familiar with their area of expertise and better understood a potential buyer's needs. I've found that those agents also tend to know the other agents who represent buyers for those properties. If they're wise, they work those connections.

While I have a license to sell properties anywhere in Texas - and I've sold everything from a west Texas ranch to an east Dallas condo - I specialize in North Dallas. I also have expertise in estate/probate sales and online marketing of properties.

If you are considering the possible sale of your home, hire a Realtor who specializes in your area or type of property. I'm positioned to provide my clients the highest level of real estate service available.
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Preston Hollow - The Undefined Boundaries

If you're curious to know more about Preston Hollow, the Advocate Magazine recently published a nice piece on the boundaries of Preston Hollow.

Check it out here: Advocate Magazine Preston Hollow Story.  Lots of history and perspective.

Update of Homes for Sale in North Dallas

We keep talking about the low inventory of available homes in Dallas. Here is a quick look at the past 10 years of availability in North Dallas and the Park Cities.

Of the approximately 16,000 properties currently available in our North Texas MLS, there are currently only 445 available in the Park Cities and North Dallas areas.

You can see that we're not at an all time low in homes for sale. However, based on current buyer demand, we have the lowest months of available inventory that we've ever seen. 

If you know someone interested in selling, please let me know. [where: 75230]

New Preston Hollow Grocery

The Preston Hollow Trader Joe's opened this past weekend with a unique nod to Ebby Halliday Realtors. I know, this grocery in the new Preston Hollow Village is not technically in Preston Hollow. But let's give it to them and call it that anyway.

The wine section of this grocery features a twist on Ebby's Little White House at the corner of Preston Road and Northwest Highway. This landmark building was once the town hall when Preston Hollow was an incorporated town. Today it stands as a thriving branch office of Ebby Halliday Realtors and still embraces our neighborhood history.   
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5 Top Secret Tips to Sell your Home

A lot of agents don't like to share their marketing secrets. Here are a few of my favorites that will benefit any home seller whether you hire me or not.[where: 75230] 

Episcopal School of Dallas wants to expand into neighborhood

ESD has bought up a block of neighboring homes and proposes to build a lower school on the properties. The school has acquired 7.6 acres of land zoned for residential properties along its southern border - all located on Montwood Lane and backing to South Better Drive.

The school campus, located at Midway and Merrell Roads, houses grades 5-12 and they plan to move their lower school students from their location at St. Michael's church in the Park Cities. The proposed expansion would also allow the school to grow from the current 1,168 students to 1,300.

Any time a business or school wants to convert a residential area of North Dallas, you can expect some resistance from neighbors. And while a school is generally considered a little less intrusive than a commercial business, they both can bring some undesirable results for the folks who live next to them. And because a school doesn't pay property taxes, like a business or home owner, the benefits to the city coffers are negative.

I wonder if we'll see the same neighborhood protests like we recently experienced with proposed developments near Preston Center? Given the players in the game ( including the school's influential parents and board members), this should be interesting to watch.
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Best Tips and Advice on selling your Dallas home

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Tour the Dallas Disney Streets

Come visit a few homes in the Disney Streets in Dallas. Located between Royal Lane and Northaven Road, it's a charming neighborhood with spacious lots, nice parks, towering trees and friendly people.

I love to sell homes in this fairy tale neighborhood. 

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Transitioning neighborhood - Midway Hollow

This delightful little neighborhood is still bargain priced for the area in 2014.

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Dallas Property Update November 2014

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Bluffview neighborhood in Dallas - update

Check out the neighborhood of Bluffview!


I'm thrilled to be included in this video. What a great place to live!
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