It’s generally a good time to refinance when mortgage rates are 1% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only .5% or less. Any reduction can trim your monthly mortgage payments. Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%; if the rate were lowered to 7.5%, your payment would then be $700, now you’re saving $70 per month. Your savings depends on your income, budget, loan amount, and interest rate changes. Your trusted lender can help you calculate your options.
Most lenders charge fees to refinance a loan. So, if you plan to only stay in the property for a couple of years, your monthly savings may not accumulate to recoup these costs. Example: A lender charged $1,000 to refinance your loan that resulted in saving you $50 each month; it would take 20-months to recoup your initial costs. Some lenders will charge a slightly higher than average interest rate on refinance loans, but will waive all costs associated with the loan. This will depend on the interest rate on your current loan.
This will vary based on your personal financial goals. We can help structure a plan for you depending on if you are looking to lower your monthly payment, take cash out of your equity or if you are looking to shorten your loan term. We offer free quotes with absolutely no obligation. Click Apply Now to find out how much you can.
A point is a percentage of the loan amount, or 1-point = 1% of the loan, so one point on a $100,000 loan is $1,000. Points are costs that need to be paid to a lender to get mortgage financing under specified terms. Discount points are fees used to lower the interest rate on a mortgage loan by paying some of this interest up-front. Lenders may refer to costs in terms of basic points in hundredths of a percent, 100 basis points = 1 point, or 1% of the loan amount.
Yes, if you plan to stay in the property for at least a few years. Paying discount points to lower the loan’s interest rate is a good way to lower your required monthly loan payment, and possibly increase the loan amount that you can afford to borrow. However, if you plan to stay in the property for only a year or two, your monthly savings may not be enough to recoup the cost of the discount points that you paid up-front.
Mortgage rates can change from the day you apply for a loan to the day you close the transaction. If interest rates rise sharply during the application process it can increase the borrower’s mortgage payment unexpectedly. Therefore, a lender can allow the borrower to “lock-in” the loan’s interest rate guaranteeing that rate for a specified time period, often 30-60 days, sometimes for a fee.
It’s unsure how interest rates will move at any given time, but your lender may estimate where interest rates are headed. If interest rates are expected to be volatile in the near future, considering locking your interest rate may be good because it allows you to qualify for the loan. Or, if your budget could handle a higher loan payment, or lender’s lock fees, you may want to let interest rates “float” until the loan closing.
We can help you navigate a poor credit history with suggestions on how to possible improve your credit score.
I've only been late a couple of times on my credit card bills. Does this mean I will have to pay an extremely high interest rate?
Not necessarily, if you’ve been late with your payments less than 3-times in the past year, and the payments were no more than 30-days late, you still have a good change at getting a competitive interest rate. Most lenders will accept certain reasons for this like an illness, or job-change, but explanations are required.
We understand this is potentially the biggest purchase of your life and want to make sure you feel comfortable about the transaction. As a mortgage broker we act as a middle man between you and the lender so rest assured that we will work tirelessly to ensure that you receive the best service. We are locally owned and operated and our services to not end when your loan closes. If you ever have any questions about your mortgage after the fact, we are in your corner and will continue to help in any way we can.
When shopping for your mortgage, be wary of lenders and servicers who do not offer you a detailed upfront quote. There have been many instances clients have reached out to us in the middle of their purchase transaction due to hidden fees their trusted financial institution tacked on towards the end. We will provide you with a quote up front so that you will know all the fees that are associated with your purchase or refinance. Our quotes come with no obligation and we are paid directly from the lender so our services to you are completely free!