There are two basic reasons to refinance:
- To save money by lowering your payment and/or interest
rate or shorten the term of your loan, and
- To get cash from your equity (or a combination of the
two).
Sometimes, if the interest rate drops enough or you are paying
off credit cards and autos, you look at both options. You should
always write out some goals for the refinance. List what are
you trying to accomplish and prioritize them. Lenders use a term
of "Net Tangible Benefit" to be sure you are gaining
financially in some way from the refinance. Don’t over
borrow but don’t under borrow either. In the Payment
Calculator you can enter different amounts of loans at the same interest
rate and see how much it will change the payments.
Many consumers base their decision on the lower payment or the
cash they are able to get. You should base your decision on whether
or not the benefits outweigh the costs. This is a basic cost
benefit analysis and Theresa Springer can help you with this
to make sure the whole loan and outcome makes sense for your
individual situation.
Another frequent question is, "Are the interest rates at
the point I should refinance or should I wait for them to go
lower?” If you are saving enough at the interest rate today
to accomplish your goals or recover the costs in a reasonable
time (see below), then do it. Timing the interest rate market
is difficult. There is a common misconception that you need to
save 2% - but this applied when consumers owed $30,000 to $40,000
on their homes. At the average home in the $150,000 range today,
even a 1% savings may be worthwhile. If you are consolidating
bills or paying off a second mortgage, the mortgage interest
rate could even rise and save you money. Theresa will help you
look at the entire picture of your finances as they are now and
look at all the refinance options that, as an experienced Senior
Mortgage Banker, she can offer. Then together we can choose what
puts you in the best financial position now and into the future.
Some questions to ask about your refinance:
- Is your current interest rate at least 1% higher than the
loan you are considering?
- Is your current loan an ARM (Adjustable Rate Mortgage) and
you're thinking of converting to a low fixed rate?
- Are you planning on staying in your home at least another
three -five years?
- Do you have a second mortgage or line of credit at a high
or adjustable rate?
- Do you want to consolidate some credit cards or car loans
to lower your total monthly payments?
- Do you want to do some major home improvements?
After reviewing this – call me and we can get together
to go over your situation and see what makes the most sense for
you.
Experience extraordinary...
Call Theresa Springer today at 360-210-7984 to
see the difference that working with an experienced home
loan professional can make for you. |
