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Most mortgage companies tell you when to refinance.
We're going to show you how to decide for yourself, and why shopping 100+ lenders through Austin Capital gives you leverage that single-lender borrowers don't have.
Since 1996, we've helped Texas homeowners avoid $400+ million in unnecessary interest payments.
Here's what we've learned about refinancing that actually matters.
The 0.75% Rule Is Outdated: Here's Why
Financial "experts" still parrot the old rule: only refinance if rates drop 0.75% below your current rate.
That advice made sense in 2010 when closing costs averaged $5,000 on a $300,000 loan.
In 2026, many homeowners with mortgages in the 7% range from 2023 can benefit from smaller rate drops than the traditional 0.75% threshold, especially with today's competitive lending market.
Here's the formula that actually matters:
Monthly Savings × Months You'll Stay in Home > Total Closing Costs + Opportunity Cost of Cash
Example From Austin, October 2025:
- Current loan: $500,000 at 7.25%, payment $3,414/month
- Refinance
to
6.5%, new payment
$3,160/month
- Monthly savings: $254
- Closing costs: $8,500 (1.7% of loan - we negotiated below market)
- Break-even: 33 months
But here's what most calculators miss: If you're 5 years into a 30-year mortgage, you've already paid $60,000+ in interest front-loaded on the original loan.
Refinancing resets that amortization schedule, you'll pay more interest in early years of the new loan than you would have on months 61-90 of your old loan.
The fix: If you're past year 5 of your mortgage and considering a 30-year refi, run the numbers on a 20 or 25-year term instead.
You'll keep a similar payoff timeline and actually save on total interest.
Why We Shop 100+ Lenders for You?
Most refinance companies are correspondent lenders. They sell your loan to one of 3-5 wholesale buyers.
Austin Capital Mortgage operates differently. Our in-house underwriters review your file first, then present your scenario to over 100 wholesale lenders, credit unions, and portfolio lenders.
This matters for three reasons:
1. Rate Variance Is Bigger Than You Think
When you compare refinance offers, closing costs typically total 2-5% of the loan amount.
On the same day in November 2025, we pulled quotes on a $450,000 conventional refinance for a client with 760 credit score and 30% equity:
- Lender A: 6.375% with $9,200 closing costs
- Lender B: 6.5% with $6,400 closing costs
- Lender C: 6.25% with $11,800 closing costs
The "best" option depends entirely on your break-even timeframe.
Planning to sell in 3 years? Lender B wins despite the higher rate. Staying 10+ years? Lender C saves you $31,000 in interest, even after higher upfront costs.
2. Specialty Situations Need Specialty Lenders
Self-employed with lumpy income? We have bank statement lenders who'll approve you where Chase won't.
Just got a big bonus that temporarily spiked your W-2 income?
We know which underwriters will use a 2-year average instead of most recent year.
Property in a flood zone with expensive insurance? Certain lenders exclude flood insurance from DTI calculations.
3. Avoiding Delays
When an appraisal comes in low or title issues surface, we don't start over.
We have 99 other lenders who might structure the deal differently.
A single-lender broker has to tell you "sorry, you don't qualify" but we find the lender whose guidelines fit your situation.
The Hidden Refinance Costs Nobody Explains (Until Closing Day)
Some original mortgages include prepayment penalties which charge a fee if you pay off your loan early typically up to 2% of the outstanding balance if you refinance during the first two years.
Here's what typically surprises Texas homeowners:
The Escrow Account Reset Nobody Warns You About
When you refinance, your old escrow account gets refunded, usually 4-6 weeks after closing.
But your new lender requires a fresh escrow account, funded at closing, with 2-4 months of property taxes and insurance.
In Texas where property taxes are high, this means:
- Travis County property tax: ~$12,000/year on a $500,000 home
- Homeowners insurance: ~$2,400/year
- New escrow requires: ~$4,800 at closing (4 months reserves)
- You'll get ~$4,800 refunded from old loan... eventually
This creates a temporary $4,800 cash drain. It's not a cost, but it's cash you can't use for 4-6 weeks.
Pro move: Time your refinance closing for early in the month. If you close January 5th vs January 28th, you'll pay 26 fewer days of per-diem interest, saving $200-400 on a typical Texas loan.
Title Insurance: You're Buying It Twice
Title insurance exists to protect the lender in case there are any errors in the title investigation process, and you'll pay for it again when refinancing.
In Texas, lenders require a new title policy even though you bought one 2-3 years ago.
Texas title insurance rates are regulated, but here's the loophole:
If you refinance within 10 years of your original purchase, you qualify for a "reissue rate" typically 30-40% cheaper than full title premium.
Your loan officer should request this automatically. In our experience, about 60% don't, costing clients $400-900.
When you get your Loan Estimate, look for "Lender's Title Insurance" and "Owner's Title Insurance." If you're refinancing (not buying), there should be a reissue credit applied. No credit shown? Question it.
The Property Tax Timing Trap
Texas property taxes are due January 31st. If you refinance in December or January, your new lender might require 14 months of property tax escrow at closing instead of the usual 2-4 months—because they need to cover the upcoming January payment plus build the escrow cushion.
Refinancing in February through November? You'll fund a normal 2-4 month escrow. This timing issue can swing your closing costs by $3,000-5,000 on a typical Central Texas home.
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