15
Dec
By support
Home Mortgage Tips

Refinancing This Winter? Follow These 5 Expert Tips to Get the Most from Your Mortgage

Refinancing This Winter? Follow These 5 Expert Tips to Get the Most from Your MortgageRefinancing a mortgage is a great way to take advantage of historically low interest rates or change your payment terms to be more affordable. And with interest rates at historical lows, there’s never been a better time to refinance your mortgage. If you’re planning to refinance your mortgage this winter, though, you’ll want to make sure you get the best possible deal.

How can you make sure that your mortgage works for you, and not the other way around? Here’s what you need to know.

Know What Your Break-Even Point Is

Your break-even point is the point at which the extra amount you paid out of pocket for the refinance and the amount you saved in a reduced interest rate is equal. In other words, it’s the point at which a refinance actually starts saving you money – and it’s important that you know when that point is. If you pay $5,000 in refinancing fees and your refinance reduces your monthly interest payment by $200, for instance, you’ll break even after two years and one month.

Opt For a Shorter Loan Term, If Possible

Refinancing gives you the ability to turn a long mortgage into a short one. And although a shorter mortgage comes with higher payments, more of your monthly payment is applied to your principal. With a 30-year mortgage, for instance, you’ll be paying mostly interest for the first 16 years – but with a 15-year mortgage, your payments will go mostly toward the loan principal after just five years.

Try To Avoid Prepayment Penalties

A prepayment penalty is an amount of money you pay in order to pay off your mortgage early. If you experience a sudden windfall and can pay off your home in one lump sum, or if you choose to sell your home, you might incur a prepayment penalty. Not all mortgages have these penalties – so talk with your mortgage professional and let them know you are looking for a morgage without a prepayment penalty.

Lock In Your Rate

Mortgage rates are at historical lows right now. One of the biggest reasons why people refinance their homes is to get lower interest rates – which is why, if you’re refinancing your home, you’ll want to choose a fixed rate mortgage. It’ll keep your interest payments low and manageable, so you don’t pay more than you have to.

Know Your Home’s Current Fair Market Value

Housing prices rise and fall over time, which can impact your loan rate when you refinance. Higher-value homes generally get better rates, so make sure you know your home’s fair market value.

Refinancing often means better mortgage terms, so make sure you take full advantage of this opportunity. Call your trusted mortgage professional to learn more.

10
Dec
By support
Home Mortgage Tips

Yes, It’s True: Mortgage Closing Costs Are Down. Here’s How You Can Take Advantage

Yes, It's True: Mortgage Closing Costs Are Down. Here's How You Can Take AdvantageMortgage closing costs have been coming down in recent years, which is good news for buyers. But if you’re buying a home in the near future, you’ll want to ensure you’re prepared to take full advantage of these lower fees – after all, keeping more money in your pocket is always good. When you close on your mortgage, take these three steps and you’ll find that you’ll pay far less in closing fees than most buyers would.

Ask The Seller To Pay Some Of The Closing Costs

In most situations, the buyer is responsible for paying all closing costs – that’s the industry standard agreement. But just because that’s what generally happens most of the time, that doesn’t mean you need to pay all the closing costs on your new home.

Negotiate with the sellers to see if they’d be willing to cover some of the closing costs. If you want to make a deal like this, though, you’ll want to add an extra incentive for the sellers to agree to it. Tell the sellers that they can choose any closing date they wish, or offer to accept the home “as-is” rather than requesting repairs.

Use The Money You Save For An Extra Annual Payment

With lower closing costs come savings that you can either pocket or spend. One great way to leverage lower closing costs is to use the amount of money you saved with reduced closing fees as an extra mortgage payment.

Most lenders will allow you to make one extra lump sum payment per year, without penalty – and by making this extra payment every year, you’ll save on interest payments. So use the money you saved in closing costs as part of an extra payment to reduce your debt load.

Reducing your closing costs and taking advantage of the lower fees is easy if you know what you’re doing. A mortgage advisor can help you to understand what closing fees are negoitable and how you can budget for success. Call your trusted mortgage professional today to learn more.

08
Dec
By support
Home Mortgage Tips

Recent College Grad? Learn How to Successfully Juggle Student Loans and a New Mortgage

Recent College Grad? Learn How to Successfully Juggle Student Loans and a New MortgageIf you recently graduated from college and are about to become a homeowner, you’re in a somewhat unique position. You’re about to embark on a great journey, but at the same time, you’re also taking on an awful lot of debt. That said, it is possible to successfully manage a high debt load if you’re careful.

So how can you make sure you can pay your mortgage, your student loans, and your mortgage expenses – all without losing your mind? Here’s what you need to know.

Make Sure You Have An Emergency Fund

Managing a high debt load isn’t necessarily a challenge if you have a consistent income stream. But if interest rates rise on your floating mortgage, if your portfolio doesn’t do as well as expected, or if you lose your job, you may find yourself unable to pay your expenses without dipping into your savings. That’s why you’ll want to establish an emergency fund – a spare supply of cash you can live on for 6 months or longer, if necessary.

Extra Cash At The End Of The Month? Attack High-Interest Debt

Mortgage rates are at a historical low right now, which makes now a great time to become a homeowner – but if you’re going to carry a mortgage and student loans, you’ll need to be smart about how you repay your debts. High interest rates can quickly add up and eventually crush you, which is why your debt with the highest interest rate should be your primary priority. This is most likely your student loan – so if you have some extra money left over at the end of every month, put it toward your student loan first.

Never Roll Student Loans Into A Mortgage

Some young people seem to think that getting a mortgage is the answer to student debt. By rolling your student loans into a mortgage, you can worry about just one monthly payment instead of two. The problem with this thinking, though, is that your student loan is probably the size of the principal on a mortgage – and you’ll have to stretch your loan term out farther in order to afford the monthly payments.

This means that you’ll pay more money in interest over the long term. Your mortgage loan is also a loan with more severe consequences for missing a payment. If you miss a mortgage payment, you can get evicted from your home – but if you miss a student loan payment, they’ll just take your tax return.

Paying off a student loan and a mortgage at the same time is a daunting task, but it is possible. Talk to a mortgage professional near you for more repayment strategies that work.