Mortgage Financing 2017-01-14T18:58:58+00:00

Q&A for Mortgage Financing

As a general rule, mortgage rates should drop 0.50-1.00% below the rate on your current loan. But while a drop in interest rates is an important factor there are other circumstances that might make a new home loan worth considering. The best time for refinancing a mortgage depends as much on your individual circumstances as it does on prevailing market rates. Contact us and one of our mortgage professionals will help you determine if your loan is still a good fit, given today’s market conditions.

What are some changes in your personal situation which might mean refinancing is a step to seriously consider?

  • Your credit history has improved. The best mortgage rates and loan terms are typically reserved for borrowers with the best credit scores. If your credit score is much better than it was when you first got your home loan, it’s possible that you can now get approval for a mortgage with a more favorable rate. Contact us and one of our mortgage professionals will assist you.
  • Your income has increased, or your other debts have been paid off. If your income has recently increased or your non-mortgage debt–such as student loans, car loans, and credit card balances have decreased, you may qualify for a lower interest rate and lower mortgage term for your mortgage. Contact us and one of our mortgage professionals will walk you through the process.
  • Your home’s value has risen. It is always a good idea to know your homes current value. Every home is different, and a mortgage professional can help you evaluate opportunities that may be created by changing home values. If the value of your home has increased recently and you have greater home equity, you might consider refinancing your home to consolidate debt or make needed home improvements. Contact us and one of our mortgage professionals will review the current value of your home.
  • You decide you want the stability of a fixed-rate loan. Many homeowners selected adjustable-rate mortgages (ARM) or interest-only (I/O) loans in recent years. Refinancing a mortgage to a traditional fixed-rate can provide stability. Contact us and one of our mortgage professionals will guide you through your refinancing options.
As appealing as that low interest rate may be, “there is no such thing as a free lunch.” Interest rates are not the only consideration, and a break even analysis is the best way to determine the complete cost of refinancing. Closing costs, points, and attorney’s fees are a few examples of embedded costs that can impact the perceived benefits of refinancing, pushing the break even point beyond two or three years. Contact us and one of our mortgage professionals will run a break even analysis specific to your situation. We’ll review your monthly savings and make sure a refinance is in your best interest.
Many consumers look for a no closing cost mortgage, believing that they are saving money. A “no cost” refinance loan is basically a loan in which little or no closing costs are paid by the borrower. Instead, the usual costs associated with a mortgage are paid by the lender. How can they afford to do that? Well, no cost mortgages generally carry a higher interest rate than a traditional loan. The higher rate compensates the lender for the fees that they have paid for you. Most of the time, the rate is between a quarter and a half of a percent higher than if you had paid the closing costs.

Before you refinance, contact us and one of our mortgage professionals will guide you through the true costs of refinancing. Our mortgage professionals will help you choose a refinancing option that works for you.

We believe it is critical that you know your options and the true costs of any transaction. That’s why honesty is the single most important aspect when choosing a mortgage professional. Our mortgage professionals are licensed and follow good lending practices. They will help you select the best mortgage lender and find a refinance transaction that works for you. Want to learn more? Contact us and one of our mortgage professionals will show you what sets us apart from the competition.