Duarte/Downey Real Estate Agency, Inc



Posted by Duarte/Downey Real Estate Agency, Inc on 6/23/2013

With mortgage rates at all time lows, you might be wondering if you should be considering refinancing your home. While it may seem like a great thing to do, there are a few things to consider before you decide. An obvious reason for refinancing to a lower interest rate is the monthly, and even more importantly the long term, savings you will get. Depending on the decrease in interest rate and the amount of the loan, you could see a savings of at least $50/month or $600/year or $6000/10 years. Refinancing to a shorter term loan can also help save on the interest you pay over the life of the loan so if you can afford a 15 year mortgage the benefits outweigh that of a 30 year. Some things to consider - If you have owned your home for a long time, your monthly payments are going more towards the principal of the loan, not the interest. Refinancing would cause you revert back to monthly payments of more interest than principal, losing the equity that you have built in your home. You may be charged for an appraisal on your home which can be around $500. The bank will want to make sure that you are refinancing for an amount your home is worth so some out of pocket expense is required. If you plan on moving in the next few years, refinancing may not be worth the amount you will pay in closing costs. There are several refinancing calculators available on the web including at http://www.zillow.com/mortgage-calculator/refinance-calculator/ and http://www.smartmoney.com/calculator/real-estate/should-i-refinance-my-mortgage-1302835660427/. No matter what you choose, being fully informed of all the options, costs and advantages/disadvantages is key to a successful refinance. Make sure you talk with you current lender, as well as other lenders to get the best refinance possible.




Tags: mortgage   loans   refinancing  
Categories: Financing  


Posted by Duarte/Downey Real Estate Agency, Inc on 3/17/2013

RefinancingReason #1: Interest Rates are Forecasted to Rise.

The Mortgage Bankers Association (MBA), which is the national organization representing the real estate finance industry is forecasting a rise in interest rates for 2013 and 2014.

Reason#2: Your Adjustable Rate Mortgage Could Adjust Up.

If you find yourself with an ARM, it may be the perfect time to explore your options regarding fixed-rate mortgages. Interest rates fluctuated every month for 2011 and 2012, according to data provided by Informa Research Services, a leading information provider to the financial industry. With interest rates plunging to historic lows over the past few years, there's nowhere left to go but up. Which leads us to...

Reason#3: The Government's Financial Involvement is Expected to End Soon.

Ever since the recession in 2008, the government has been buying up mortgage debt from banks in an effort to stimulate the housing market. This is expected to end in the next two years, and it is anyone's guess when exactly this will take place. Refinancing now is much better than waiting until you start to see the signs of non-involvement, by which time it could be too late.

Reason#4: Cutting Down on Interest.

If you find yourself in a 30-year mortgage, it may be the best time to explore your options regarding a 15-year, fixed-rate mortgage. While your monthly payments would be higher, the amount of money you pay for your home would be significantly less. Interest payments on a 30-year mortgage can jack up the price of a home astronomically. While the monthly payments may have looked appealing initially, paying off the principal sooner will leave you much better off financially in the long run.




Categories: Financing