Is now the right time
to refinance?
Traditionally,
the decision on whether or not to refinance has meant balancing the
savings of a lower monthly payment against the costs of refinancing.
But in recent years, lenders have introduced "no cost"
and “low-cost” refinancing packages that minimize or completely
eliminate the out-of-pocket expenses of refinancing. These refinancing packages compensate with a higher interest rate,
or by including some of the costs in the amount that is financed.
With
traditional refinancing, the most often cited rule-of-thumb is that the
interest rate for your new mortgage must be about 2 percentage points
below the rate of your current mortgage for refinancing to make sense. However, with the newer low- and no-cost refinancing programs, it
can be worth your while to refinance even if the reduction in the interest
rate is less than 2 percentage points. How long you expect to stay in your home is also a factor to
consider. If you'll be moving in a few years, the month-to-month savings may
never add up to the costs that are involved in
refinancing. With interest rates at
an all time record low, it makes sense in
today’s market to secure the absolute lowest interest rate possible. And don't wait too long to lock in your rate. Waiting for a better rate is many times costly. The odds of hitting the absolute bottom of the market are very
unlikely. Trying to time the market right, you may miss out on the opportunity
to refinance.
The
process is relatively simple. A Landmark Mortgage
qualified loan professional will need some
basic information. The process takes less than 15 minutes and can be done
on the telephone. The first step is to discuss your purpose to refinance. Next we'll want to know what goals you are
attempting to accomplish. Two completely different examples of goals are, one family may want
to refinance to access equity to pay for a college tuition while another
family may simply want to lower their total monthly obligations. The next step is to compare your income against your monthly debt
obligations. Then we'll ask for you to disclose your
current monthly debt obligations. Your Landmark Mortgageloan
professional will then
compare those ratios with available loan programs to determine the best
mortgage product to fit your needs.
If everything makes sense, the next step will be to complete a loan
application. From the loan application, our staff will begin verifying the
information on the application. Once this information is processed, it is submitted for formal loan
approval and the refinance process will be complete.
Landmark Mortgage
specializes in analyzing a homeowners overall financial profile to
determine what truly is best for you.
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