Is Now a Good Time to Refinance?

As you mentioned, rates are hitting rock bottom, which is great if you are a homeowner who is considering refinancing! 

To know if it’s the right time to refinance, you’ll want to consider a few factors unique to your situation. The first thing to consider is how long you plan to stay in your home. Your financial goals would need to be taken into consideration as well and your current credit score would be another major factor. All of these things, along with current refinance rates will be pivotal in determining if now is the right time for you to refinance.  

With rates the lowest they’ve been in 50 years, there is a huge opportunity to not only lower your monthly payment, but also reduce the monthly interest you are paying! 

Homeowners often consider refinancing when they become aware that mortgage rates are dropping below the rate they are currently paying. It’s common to take notice and start to mull over your options for a better deal. Secondly, it might be that you are looking to pay off your loan quicker or if you’ve been in your home long enough that you’ve gained considerable equity so that you can drop your mortgage insurance. Another common reason is that you might be in a position to want to use your home equity for a cash-out refinance. 

Put simply, there are 4 main reasons you should consider refinancing now. 

•Reduce Rate

•Lower Payment

•Reduce Term (lower from a 30 year to a 15 year for instance)

•Drop mortgage insurance

Let's say a homeowner owes $300K and they have a rate of 4.00. If they are able to refinance and lower their rate to 2.75, the borrower can save over $300 monthly! That's $75,000 over the life of the loan. Now, if they can reduce the rate and also reduce the term of the loan - perhaps going from a 30 year to 15 year mortgage term, they will now save $149,000 over the life of the loan!

With rates so low, we are also seeing homeowner's leverage their equity in their home for various reasons: 

•Cash out Refinance

•Consolidate Mortgages (HELOC, 2nd mortgage, Solar)

•Debt Consolidation – Cash Flow

•Home Improvements & Additions such as pools or major renovations

•College Funds for the Kids

•Business Ventures

•Cash Cushion for hard times like medical emergencies 

My team is well versed in all loan programs. That’s important because every loan program is different with complex rules. It’s imperative that your loan originator be knowledgeable about every aspect of the type of loan you qualify for or would like to obtain. Our dedication to ongoing training and education keeps us at the forefront of expertise in loan programs. 

The primary goal is to improve your family’s situation through your home loan and help you to save money so that you can enjoy the lifestyle you want for your family. We don’t want you to feel like a mortgage is too heavy of a burden or hindering you from enjoying the home you are in. We are able to work with all loan programs, such as Conventional, FHA, VA, USDA, Portfolio/Non-Conforming and JUMBO. 

This may be the part that seems scary when you first broach the idea, but in truth it’s super simple! It’s not your job to be the expert in loan programs and qualifying factors. It’s ours and we will partner with you every step of the way. 

The first thing we’ll do is connect with you on a 15-minute phone call to chat through where you are right now and where you’d like to be. Once we understand your goals, we will request a current mortgage statement, an estimated credit score and from there we will put together a basic quote to create a jumping off point. Our home loan consultations are offered at no obligation to you, so the first thing to do is call me and talk about what you’d like to see happen! 

The value of a sound refinance cannot be overstated. Many things become possible when you and your family are able to lower your monthly payment, shorten the length of your loan and lower your monthly interest rate. The money saved through a good refinance has helped families through difficult times such as loss of jobs, being furloughed or medical situations. You will also potentially have the opportunity to leverage cash equity for other areas of need like debt consolidation or home improvements. 

A major reason I love what I do is because I am able to improve the quality of life for my clients. Mortgages may sound like nothing but numbers, but in reality, those numbers mean the world to the people attached to them. That’s what it’s all about for me. I am passionate about finding the right mortgage for your family with the best possible terms. 

 A simple rule of thumb to keep in mind is this: if you can save 1% or more on your interest rate and/or reduce the term length of your loan, it’s often a good idea to consider a refinance. Another consideration is the length of time you plan to stay in your home. If you plan to stay longer than 2-4 years, then you will maximize savings and refinancing would likely be a great option. 

Our team will analyze and review the cost vs. saving of all refinance options for you so that you don’t have to.