13
Jan
By support
Mortgage Rates

How Low Can They Go: With Mortgage Interest Rates Low, Should You Refinance?

How Low Can They Go: With Mortgage Interest Rates Still Dropping, Should You Refinance?Do you have a mortgage? You’ve likely seen or heard a lot about mortgage refinancing as interest rates remained low in recent months.

In today’s blog post we’ll explore the topic of mortgage refinancing, including when you should consider refinancing and how to take advantage of low interest rates.

What is Mortgage Refinancing?

In simple terms, refinancing refers to the practice of taking out a new mortgage and using the proceeds to pay off your old one in its entirety. You’ll go through the full borrowing process with your chosen lender, including the credit check, financial history and employment history in order to ensure that you have the ability to pay your new mortgage – even if your monthly costs are lower.

Depending on your financial goals, you may refinance to tap into some of the equity you’ve built up in your home, or you may refinance in order to secure a new mortgage with a lower interest rate or better payment terms. Whatever the case, know that if you decide to refinance you’ll be engaging with a lender for a brand new mortgage.

When Should I Consider Refinancing My Mortgage?

When you should refinance depends on your reason for refinancing. If you’re looking to reduce your interest rate and your monthly payments, you should refinance your mortgage whenever interest rates drop enough that you will be able to save more in monthly payments then you will be paying in closing costs and fees.

Consulting with a mortgage professional is the best way to understand how much money you can save, but to get a quick idea simply take a look at how much you owe on your mortgage, your current interest rate and the types of rates you may qualify for. If you owe $200,000 at 5.5 percent interest and you can refinance down to 4.5 percent you’re going to save a considerable amount over the long term.

How to Take Advantage of Low Interest Rates

Refinancing your mortgage is a major financial decision and not one that should be taken lightly. Careful research is needed to determine if now is best time to switch up your mortgage to one with a lower interest rate.

11
Sep
By support
Mortgage Rates

FICO Scores and Your Mortgage: How to Bump Your FICO Score to Secure a Better Mortgage Rate

FICO Scores and Your Mortgage: How to Bump Your FICO Score to Secure a Better Mortgage RateIs your credit score holding you back from getting the best rate on your next mortgage? The good news is that there are actions that you can take to increase your credit score and improve the interest rate offered on your next home loan.

Here are a few easy and effective tips to help you get your credit score to where you want it to be.

Increase The Amount Of Credit Available To You

The easiest way to increase your credit score is to increase your credit limit, as this reduces your utilization ratio. To do this, you can either apply for another credit card or ask a current credit card provider to increase your credit limit. Those who have a stable income and have made their monthly payments on time should have no problem getting an increase of their credit limit.

Pay Down The Balances On Your Credit Card

Paying down your credit card balances can help you increase your credit score, as a large portion of your score is determined by the percent of available credit that you are using. Ideally, you want each card balance to be under 30 percent of the total limit while also keeping your total credit usage to less than 30 percent of available credit. A utilization ratio under 30 percent tells lenders that you can manage credit responsibly.

Settle Past Due Debts

Roughly one-third of your credit score is determined by your ability to make payments in a timely manner. If you have any payments that are 30 or more days past due, you may wish to settle those debts or make arrangements to pay them.

Creditors who allow you to roll past due payments back into your loan may update your credit report to say that you are current on your payments. This could have a huge impact on your credit score and help you qualify for a better rate on a home loan.

Increasing your credit score is one of the best ways to get the best rate on a mortgage. This may enable you to gain additional leverage when negotiating for a better rate that may lower your monthly payment to a more affordable level.

For more information about how to get a great mortgage rate for your next home purchase, or for advice on how to improve your credit score, contact your local mortgage professional today.

26
Jun
By support
Mortgage Rates

Case-Shiller: Home Price Growth Slows in April

Case Shiller Home Price Growth Slows in AprilThe S&P Case-Shiller Index for April shows that while home prices continue to grow, they are doing so at a slower pace as compared to April 2013. The Case-Shiller 20 city index reports that home prices expanded at a year-over-year annual rate of 10.80 percent as compared to 12.40 percent in April 2013.

Month-to-month data showed that home prices rose for the second consecutive month. The seasonally- adjusted month-to-month growth rate for the 20 city home price index was 0.20 percent against March’s month-to-month home price growth rate of 1.20 percent.

Slower Home Price Growth: A Silver Lining?

According to the Case-Shiller 20-City Home Price Index 19 of 20 cities posted slower growth rates for home prices in April. Analysts say that this may not be all bad news as rapidly rising home prices, a shortage of available homes and stringent mortgage credit requirements have caused would-be buyers to be sidelined. Inventories of available homes are increasing which should help more buyers enter the market.

David M. Blitzer, chair of the S & P Dow Jones Indices Committee said that last year, some sun belt cities posted annual home price growth rates near 30 percent, but this year, the maximum annual home price growth rates are lower than 20 percent for all cities on a seasonally adjusted annual basis.

Month-to-month price growth was described as seasonally strong. Five cities posted month-to-month price gains of two percent or more.

Seven of the 20 cities included in the 20-city index posted slower rates of home price growth in April than for March: Cleveland, Ohio, Las Vegas, Nevada, Los Angeles California, Miami, Florida, Phoenix, Arizona and San Diego, California were included in this group. Boston, Massachusetts posted a 2.70 percent gain in home prices between March and April; this was the city’s largest month-to-month gain since the inception of the 20-City Index.

Lower mortgage rates, more homes on the market, and a recent statement by the Federal Reserve that it did not expect to raise its target federal funds rate until mid-2015 are seen as factors that are helping to stabilize housing markets.

FHFA Reports Home Price Gain Rate Unchanged in April

The Federal Housing Finance Agency (FHFA) that oversees Fannie Mae and Freddie Mac reported that home prices connected with mortgages owned or backed by Fannie Mae and Freddie Mac rose by 0.70 percent, which was the same pace in month-to-month home price growth as for March. Year-over-year, home prices rose by 5.90 percent.

On a seasonally-adjusted month-to-month basis, home prices ranged from -1.3 percent in the New England division to +0.60 percent in the East South Central division. Year-over-year, home prices in the nine census divisions increased at rates between 1.70 percent for the Mid-Atlantic division to 10.70 percent for the Pacific division.

The peak home-buying season during spring and summer months and labor market performance will likely be strong influences on home price growth in the coming months.