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/

 

Thinking About Refinancing Your Home Loan This Year? Avoid Common Mistakes and Learn Your Choices

Home Refinancing

Have you been thinking about refinancing your home mortgage this year? Mortgage enterprises Fannie Mae and Freddie Mac, which buy most of the conventional mortgages from lenders, predict continuing low interest rates throughout 2020. If you refinance your 30-year fixed rate or adjustable rate mortgage (ARM), you could lower your monthly payments, reduce the total amount of interest you pay, or potentially take cash out of the equity in your home to achieve financial goals, pay for education costs, or do home improvements.

It may seem like a big change to refinance your mortgage, but if you can reduce your mortgage interest or monthly payment, it could be a sound financial choice. And it is your choice. Did you know that in Canada, mortgages are refinanced every five years whether the owners want to refinance or not? 

Instead of having to refinance every five years like they do in Canada, here in the U.S., you don’t have to refinance at all. Instead, you can take time to review your financial options and decide when and how to refinance your home mortgage. So, what are some of the reasons you might want to refinance your 30-year fixed rate or 15-year fixed rate home loan? 

  • Lower your monthly mortgage payments
  • Lower your mortgage interest rate
  • Change your loan type or program
  • Eliminate mortgage insurance
  • Get money for home improvements or repairs
  • Pay off high interest debt
You have many choices to refinance your home mortgage, and you can achieve a variety of financial goals through refinancing. At the same time, it’s important to understand how refinancing will impact your finances.

Some of the factors that can affect the total cost and long-term impact of mortgage refinancing can include:

  • How long you’ve lived in your home
  • How much debt you have and what type (student loans, credit cards, medical debt)
  • Closing costs
  • Mortgage prepayment penalties
  • Your credit score
  • Equity in your home

Every financial situation and refinancing is unique, and you can prevent mistakes and make the right financial decisions by working with an experienced home mortgage refinancing professional. Not only can they offer you a choice of lender and mortgage refinance programs, they can tell you about opportunities you may not be aware of and spend the time needed so you can make a fully informed and wise refinancing choice.

Sources

https://www.quickenloans.com/learn/should-i-refinance-my-mortgage-loan-what-you-need-to-consider 

https://www.latimes.com/business/hiltzik/la-xpm-2014-jan-16-la-fi-mh-canada-20140116-story.html

Are You Currently Wondering If You’re Missing Out On Refi Opportunities? Hurry Now! Don’t Be the Last One to Take Advantage of Low Mortgage Refinance Rates

Low Mortgage Refinance Rates

From Fannie Mae and Freddie Mac to the National Association of Realtors, experts are predicting that home loan interest rates will remain under 4% as we start 2020. Did you know that a difference of as little as one-tenth of one percent could make a difference in your monthly payments, and it could also save you a lot of money over the life of your own?

Chances are, interest rates won’t rise as high as they did in the early 80s, when they ranged between 16 and 18% for three years. But as recently as 2018, they were well over 4%.

How much could an interest rate reduction save?

Let’s say you’ve had your mortgage for a while at 4.5%. Would the savings be worth it to refinance to a mortgage at 3.5% interest if it was available? On a $500,000 30-year fixed rate mortgage, refinancing to 3.5% would reduce your monthly payments from approximately $2,533 to $2,245, a savings of nearly $300 a month ($288). Over the course of a 30-year mortgage, you would pay over $100,000 less in interest with 1% point difference. At .5% less, you would still save nearly $150 a month, and over $50,000 over the life of the mortgage.

You may find that it’s surprisingly simple to refinance your mortgage. If you have an FHA or a VA loan, these programs offer “streamline” refinance options if you are able to reduce your interest rate.

While as recently as 2010, the three biggest banks originated most of the mortgages in the U.S., now there are more choices in mortgage lending and financing. By refinancing your mortgage, you can lock in today’s low home mortgage interest rates and save money on your monthly mortgage payments. If you invest even a part of the money that you save, you’ll be financially far ahead of where you would be if you hadn’t taken that step to reduce your mortgage interest rate.

Sources

https://homeguides.sfgate.com/much-difference-25-make-monthly-mortgage-payment-100688.html [I just did the math myself and rounded the numbers – principal & interest only]