Monday, April 18, 2011

Would Refinancing Work For You?

Despite prevalent historically-low mortgage rates, many homeowners continue to dish out monthly mortgage payments at the high interest rates calculated for their original contracts, some from many years ago. Could you be saving money on your mortgage by refinancing? There's only one way to find out for sure — pick up the phone and call.

When reviewing your mortgage, it's important to consider how your needs may have changed. Are you interested in paying off your mortgage faster? Consolidating your debt? Using some of the equity from your home? Or perhaps you’re thinking of moving, or investing in a second property?

If it’s simply taking advantage of today’s lower mortgage rates that appeals to you, you’d be wise to view refinancing as an opportunity to continue toward your goal of paying off your mortgage in the same or less time, as opposed to starting over. For example, if you are five years into a 25-year mortgage, let’s look at amortizing your new mortgage over a 20-year period, or even a 15-year period instead of setting up another 25-year term, and see if your budget might allow you to become mortgage-free that much sooner or amortize it at 30 yrs for a lower payment but utilizing your pre payment options during the year to reduce your mortgage. This also allows you to be in control of your mortgage versus the Lending institution having you pay the higher payment at the lower amortization.

Through the re-financing calculations, you may discover a new source of extra monthly funds. But you’re advised to hold off from buying a big-ticket item before your final paperwork is approved, to avoid raising your debt-to-income ratio to a level that disqualifies you for the terms of your new loan.

Let’s talk. There’s no obligation for asking about these, and other refinancing considerations.

Before you refinance or renew your mortgage call me first to get an unbiased and honest opinion.

Today’s 5 yr closed rate is 3.99% and Variable rate is 2.20%

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