Refinancing ... is it right for me? How to find out ...

Reblogger Roy Kelley
Real Estate Agent with Realty Group Referrals 16766

For anyone considering refinancing, their journey of discovery must start with a thorough understanding of the details of their current mortgage and current mortgage statement.

 

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Refinancing ... is it right for me?  How to find out ...
 
 
There are many factors that influence the rise and fall of mortgage interest rates ...

Case in point, right now the fear of a global coronavirus outbreak has the markets in a tither and that anxiety has resulted in lower and fluctuating interest rates.  How long will the virus continue to influence the markets?  Right now, that is unclear.

As typical, the lower interest rates have many asking questions and inquiring about refinancing ...  
 
Homeowners ask:     

  1. Can I Refinance?
  2. Is it smart to Refinance?  
  3. What can I accomplish by Refinancing? 
 
 
Years ago, the theory was ... if you could save 1 percentage (1%) point off your mortgage rate ... it was smart to Refinance your loan.  

That thinking then gave way to a new measurement.  The goal of saving one-half to three-quarters (1/2% to 3/4%) off the current mortgage rate held then became the new norm.  

Because of those old but well-known "rules of thumb", many of my current clients now ask me, "What defined percentage or dollar amount of savings should be my signal that it's my time to Refinance?"  

Unfortunately, an answer is not that quickly available or easy to provide ... 

The wisdom or "correctness" of their refinancing (or not) actually hinges on far more than interest rates alone.  There is no universal, quick or simple broad answer to provide.  

Instead, the answer they seek is truly specific to their individual and unique needs and goals.  And in order to provide them that answer, I must ask questions and gain facts first.

For anyone considering refinancing, their journey of discovery must start with a thorough understanding of the details of their current mortgage and current mortgage statement. Many decision-making tools and needed information are found there.
 
Here's just a small sample of the facts/info that must be shared between homeowner/borrower and lender when considering a Refinance:

  • Current Mortgage Interest Rate
  • Current Loan Balance
  • Current Mortgage Escrow(s) Balance
  • Current equity held in the home
  • Does the current payment include PMI (Private Mortgage Insurance)?
  • Remaining term of mortgage payment (Or the Original Loan Term)
  • Current Credit Scores
  • Current outstanding Debt (Debt to Income Ratios)
  • More ...

Other details must be discussed as well in order to come to a solid and wise monetary decision.  Additional  discussion will include the following:
 
 

What needs must the Refinance meet?


   A.  Payoff of other debt(s) such as higher rate credit cards, Student Loans, or Home Equity Lines of Credit
   B.  Is a reduction in payment term desired?  (Example: Reducing a 30-year loan to a 20-year of 15-year term)
   C.  Getting rid of PMI (Private Mortgage Insurance)
   D.  Cash-Out:  For payment of home improvements or home repairs
   E.  Lowering of Interest Rate (Lowering of monthly mortgage payments)
   F.  Change of Mortgage Program (Example: ARM to a Fixed-Rate loan)
 
Borrower and Lender must consider much more together too.  Such as:
  • How long will it take to recoup the cost of the Refinance?
  • Expectations to stay in the current home?  (This speaks directly to calculating the "break-even" point for refinancing).
  • Add closing costs to the Loan balance or pay from personal savings to save even more interest over time?
  • More ...

Borrowers considering this action must remember that closing costs will be involved should they pursue a Refinance Loan.  Those costs must figure into their decision-making process.  

As with an original mortgage, those costs, and the interest rate secured, rest upon many factors, including credit scores, debt held, and more.  Generally, Refinance Closing Costs will include:
  • Appraisal Fee
  • Loan Origination Fee
  • Title Insurance
  • Homeowners Insurance
  • Taxes
  • More ... (Costs specific to the individual Borrower)

There are different methods that can be utilized for paying the Closing Costs incurred with a Refinance.  Payment can be made at the time of Closing.  It's also possible that the costs of Refinancing can be "rolled into" the new loan itself.

Again, a thorough discussion of the pros and cons of each method ... as well as the possibility and availability of doing so ... must be held between borrower and lender.  A clear and wise choice can only be revealed after such a conversation is held.

Of special note:  Because the success (and monies) realized from a Refinance rest so heavily upon interest rates, response time and timing need to be of the utmost concern.  Clients must remain available and respond quickly to all communications and requests from their lender.  

And both client and lender must be ready to react to fluid market indicators.  Response time and timing of actions taken can make a huge difference as to the interest rate secured and ultimate success found.

As with all mortgage financing, those hoping to Refinance benefit from starting their mortgage process early.  Acting proactively as to checking their credit, their credit report, collection of needed documentation ... and reaching out to their lender.

So for anyone wondering ... can I Refinance?  Is it smart to Refinance?  Start now.  Don't hesitate.  Don't wait.  

The sooner you start and the sooner you ask your questions, the sooner you will have the answers you need to move forward confidently ...  
 
 
 
* Are you dreaming of buying or refinancing a home or Investment Property in New Lenox - Will County - Chicago - Chicagoland - IL/WI?

Contact me today! I'll put my 40 years of mortgage experience and expertise to work on your behalf.
I'm easily found at:

 
Gene Mundt
 
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI License #216987
 
 
American Portfolio Mortgage Corp.
 
 
NMLS #175656
 
 
 
Direct: 815.524.2280
Cell: 708.921.6331
eFax: 815.524.2281
 
 
 

  

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Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

 

  

 

 

Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

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Rainmaker
3,437,892
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Roy. Can't go wrong following the wisdom of Gene Mundt. Enjoy your day!

Feb 08, 2020 01:51 AM #1
Rainmaker
5,614,624
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Please be sure to leave comments at the original blog by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Feb 08, 2020 05:48 AM #2
Rainmaker
3,306,860
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Good Morning Roy,  great reblog by Gene and one that is so important for people to know about.

 

Feb 08, 2020 08:15 AM #3
Rainmaker
4,673,183
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Roy,

You always pick some wonderful posts to reblog.  This one by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi is a wonderful example.  It covers all the points to make a good decision.  A

Feb 08, 2020 02:26 PM #5
Rainmaker
183,931
Eva B. Liland Century 21 Doug Anderson
Century 21 Doug Anderson - Lancaster, CA
Glad to be of Service 661-714-1643

There are so many things to keep in mind when refinancing ane Gene Munt surely knows them all. Thanks for the re-blog Roy Kelley .

Feb 09, 2020 09:09 AM #8
Rainmaker
1,250,353
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thank you so much for sharing this timely (and I think very valuable) info with your readers, Roy Kelley ... the inquiries regarding Refinancing have definitely picked up.  Hopefully this info helps those considering this action ...

Gene 

 
Feb 09, 2020 09:49 AM #10
Rainmaker
5,614,624
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thanks so much for stopping by. It is always good to hear from you.

Feb 09, 2020 09:53 AM #11
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Rainmaker
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Roy Kelley

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