02
Oct
By First Rate Financial Group
Mortgage Application

Should Homeowners Refinance?

Should Homeowners Refinance?Most people have heard the saying that it might be a good idea to refinance if mortgage rates drop. For those who might not know, refinancing is essentially taking out a new loan to replace the old one because the new loan has a lower interest rate.

This could shorten the time span of a long time and reduce monthly payments, or save money on the total cost of the home. At the same time, refinancing is not right for everyone. How can homeowners determine if refinancing is right for them? 

Do They Qualify?

Just because there are lower interest rates available does not mean that homeowners are going to qualify. It is important for homeowners to make sure they qualify for lower interest rates on their home loans. Be sure to conduct a quick credit check to clean up inaccuracies on the credit report. Then shop around and get quotes from different lenders. 

What Are The Potential Savings?

If homeowners qualify for a better rate on the mortgage, it is time to crunch the numbers. Everyone needs to figure out exactly how much money they are going to save depending on which refinancing option they choose. Some of the factors to consider when looking at refinancing plans include the terms of the loan, the interest rate, and the overall monthly payment. 

What Are The Closing Costs?

Finally, there are going to be the closing costs that go along with every refinancing plan. The good news is that these closing costs on negotiable. Sometimes, the closing costs will determine whether or not refinancing is worth it. Therefore, homeowners need to consider the closing costs as well. If the closing costs appear high, make sure to speak with different lenders and see if they are willing to provide a break on the costs.

Are The Homeowners Planning On Staying In The Home?

Finally, refinancing is only going to be worth it if the homeowners are planning on staying in the home. There is no point in paying for a new home loan if the homeowners are planning on moving next year. Therefore, be sure to consider this along with all of the other questions listed above to determine whether or not refinancing is worth it.

 

27
Aug
By First Rate Financial Group
Home Mortgage Tips

Refi or Wait? How to Choose Between Refinancing Your Mortgage Now or Waiting Until You Need the Money

Refi or Wait? How to Choose Between Refinancing Your Mortgage Now or Waiting Until You Need the MoneyRefinancing your existing mortgage may provide you with the opportunity to lower your interest rate, reduce your mortgage payment and adjust your loan term. For those homeowners who have lived in their home for more than a few years, pulling equity out of the property for everything from a luxurious vacation to making home improvements is a tempting potential benefit.

However, with property values and interest rates adjusting frequently, you may wonder if now is the best time to refinance your mortgage.

Using Equity From Your Refinance

One factor to consider when debating between refinancing now and waiting relates to pulling equity out of your home. If you need access to the cash now for home improvements or other purposes, refinancing now may be ideal. Even if you do not need access to your equity for several months or longer, you can lock in today’s rates and invest the money in other vehicles, such as CDs or bonds, until you need the cash.

Anticipating Market Changes

You may have heard that the interest rates for home mortgages have been slowly rising, and while they remain close to historic lows, they are projected to continue to rise. Nobody can predict with certainty how interest rates will adjust in the next few months and years, and locking in today’s rates may be beneficial. Keep in mind that if rates decline significantly in the near future, you can always look into refinancing again.

Reducing Your Principal

If you have a higher interest rate on your existing mortgage, your principal balance may be reduced at a slower rate than if you refinance to a lower interest rate. In addition, if you refinance from a 30-year term to a shorter term length, your principal balance will also be reduced more quickly in most cases. In many situations, refinancing your home mortgage today may establish a more efficient repayment schedule that allows you to accrue equity at a faster rate.

Each homeowner has unique factors to consider when refinancing based on property value, credit rating, existing loan terms and other factors. While many will benefit by refinancing an existing mortgage today, you can speak with a mortgage professional for specific advice and recommendations regarding your situation. Call your trusted mortgage representative today to inquire about the options and to begin working on your refinance loan application.

14
May
By First Rate Financial Group
Mortgage

3 Signs It Is Time For You To Refinance Your Mortgage

3 Signs It Is Time For You To Refinance Your MortgageIf you are looking for ways to save money on your mortgage, refinancing might be a good option. For those who might not know, refinancing can help a homeowner reduce monthly mortgage payments by switching to a lower interest rate. 

Basically, the homeowner takes out one loan at a lower interest rate to pay off the old loan, which is at a higher interest rate. While the homeowner may have to pay closing costs a second time, this could save someone hundreds of thousands of dollars over the life of the loan. Furthermore, those who want to pay off their loan more quickly may be able to do this as well. There are a few signs that someone should refinance their home loan immediately.

1. Current Mortgage Rates Are Significantly Lower

One of the biggest signs that someone should refinance is that current home loan interest rates are way lower than what they have. While everyone’s financial situations are different, if the current average interest rate is more than a point lower than your current interest rate, you should consider refinancing

While not everyone is going to qualify for the current average interest rate, some people might. This means that this is a possibility worth examining. If you can qualify for a much lower interest rate, it is time to refinance.

2. Your Credit Is Good

In order for you to qualify for home loans with lower interest rates, your credit has to be in good shape. There are ways for you to improve your credit score. Paying off credit card debt, paying your bills on time, and fixing errors on your credit report are all great ways to raise your credit score. If your credit score is good, it might be time to refinance.

3. You Are Not Moving Any Time Soon

As mentioned above, you may have to pay closing costs when you refinance. Therefore, if you plan on staying in that house for a while, this could be a good time to refinance. On the other hand, you don’t want to pay closing costs just to move again next year.

These are a few of the biggest signs that indicate it is time for you to refinance. Don’t pass up this chance to save money!