Should I Start Refinancing My 30-Year Fixed Mortgage Soon Or Should I Aim For A Shorter-Term Mortgage? Need A Sound Advice Now.

If you can reduce your mortgage payments by refinancing and lock in a payment you know you can afford, you should consider refinancing. Here are a few financial tips for mortgage refinance that fit the current financial climate:

Do you have high-interest debt you’re working to pay off?

You may owe $10,000 or $20,000 in credit card debt. Have you looked at the difference between how much you’re paying in interest and how much on the balance you owe? You may find that 50, 60, and even 80 percent of your monthly payment is paying interest.

Using a mortgage refinance to pay off high-interest debt with a low-interest 30-year fixed-rate mortgage could save you thousands of dollars. Refinancing your mortgage to pay off high interest credit card debt may be a lot of work but your financial result will be worth it.

Do you have student loan debt you want to eliminate?

Student loan interest rates may not be quite as high as high-interest credit cards, but the average unsubsidized student (or parent) loan starts at 6 percent interest and can go up from there. Similar to credit card debt, you can save money on interest by refinancing to a lower-interest 30-year fixed rate mortgage.

Can you reduce your monthly mortgage payment?

Lowering your monthly mortgage payment is one of the best reasons to refinance. If you can locate a loan which has a lower annual percentage rate (APR) than your current loan, it’s worthwhile to investigate your refinancing options.

Can you afford a shorter-term mortgage?

If your finances have improved significantly since you got your initial mortgage, you may benefit financially from refinancing from a 30-year fixed mortgage to a 15-year loan term, or any other term such as 27 year, 25 year, 21 year, 18 year etc.  The options are limitless with a savvy independent mortgage broker on your side. The savings in interest can be substantial.

For example, if you have a $500,000 30-year fixed rate mortgage at 4 percent, you’ll pay approximately $859,300 in principal and interest over the course of your loan. If you refinance your loan to a 15-year mortgage, even at the same 4 percent interest, your total payments will be $665,719. That’s a difference of almost $200,000.

Refinancing your 30-year fixed rate mortgage can be a smart financial decision for a lot of reasons. An experienced independent mortgage loan broker such as California Platinum Loans can let you know what your options are so you can make the right financial decision.

Sources

https://www.cnbc.com/2019/08/09/millennials-drive-mortgage-refinance-boom-and-lenders-are-scrambling.html

https://www.nerdwallet.com/blog/loans/student-loans/student-loan-interest-rates/

California Platinum Loans

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Have You Ever Heard Of A Financial Advice to Only Get a 15-Year Mortgage? Is a 15-Year, Fixed-Rate Mortgage Right for You?

You may see financial advice that encourages you to take out a 15-year mortgage in preference to a 30-year fixed rate mortgage. The reasons for this advice vary, but include lower amount of interest paid over the course of the loan, paying off your house sooner, and building equity in your home more quickly. Advisers base most of their articles on a $200,000 mortgage. In a higher housing cost area or one where prices are rising quickly, does this advice hold true in all cases?

You’ll pay less interest over the course of your loan with a 15-year mortgage

This is true if you plan on staying in your home for 15 years or longer. Over the course of a 15-year, $500,000 mortgage at a fixed 4% interest rate, you’ll pay about $167,000 in interest over 15 years. A 30-year fixed-rate mortgage at 4% interest will cost you about $193,000 more in interest over the course of 30 years. But these figures make the most sense if you plan to stay in the same home and same mortgage.

You’ll build equity in your home faster

While you start to pay your principal down on your home faster with a 15-year fixed rate mortgage, you can also make additional house payments on a 30-year mortgage to help build equity. You should think about the uses of home equity in your overall financial plan. Equity in your home is valuable if you want to apply for another type of loan, including a home equity line of credit (HELOC) or a business loan.

You’ll pay off your house in half the time

This is completely true: a 15-year mortgage will pay off your house twice as fast as a 30-year mortgage. If your goal is to own your home and stay in it, then paying off the mortgage as quickly as possible is a clear financial choice.

You don’t have to limit your choices to a 15-year or a 30-year fixed rate mortgage. You can choose other amortization terms, including a 10-year mortgage, or adjustable rate mortgages (ARMs) with varying terms. A qualified and experienced mortgage professional can help you to decide which mortgage terms are right for you. Talk with one today to learn what your best home loan options will be.

Sources

https://www.daveramsey.com/blog/why-daves-against-30-year-mortgages

California Platinum Loans

  https://californiaplatinumloans.com

At The Moment, Is There a No Ratio Jumbo Loan and Can it Help You to Achieve High Priced Home Ownership?

You may find mortgage advice online that indicates you need to have a low debt-to-income ratio (DTI) to qualify for a jumbo mortgage loan. How low? A DTI of less than 36% is one of the most often-quoted figures.

While many lenders use debt-to-income ratios to determine eligibility for mortgages, not all do. You can find no ratio jumbo mortgages that can help you to buy the home you want.

What is a No Ratio Jumbo Home Mortgage?

A no ratio jumbo home mortgage is a home loan issued by a lender that uses criteria other than debt-to-income (DTI) to qualify you for your loan. You may find jumbo home mortgages that ask you to make varying down payments, but don’t require you to have a DTI lower than 36%.

What other criteria could I need to meet for a No Ratio Jumbo Loan?

No ratio jumbo mortgage loan criteria can vary. Some lenders may ask for you to show a reserve fund equal to a specified number of mortgage payments: for example, three to nine months worth of mortgage in the bank. You may also qualify based on co-ownership of property or business income.

You can also be asked to make a down payment that varies depending on your credit score. Some 100% loan-to-value (LTV) loans may be available for no ratio jumbo home mortgages.

One thing to remember about no ratio jumbo home loans is that they can fit your individual needs. One of the best reasons to consult with an experienced mortgage loan professional is to gain access to a variety of mortgage products. You may access additional loan programs that can help you to buy your high-priced home or luxury condo. These can include bank statement loans, and loans for buyers with limited credit history.

Sources

I just used this as an example: https://www.fundamentalrate.com/

https://www.rocketmortgage.com/resources/jumbo-loan

California Platinum Loans

  https://californiaplatinumloans.com