13
Aug
By support
Home Mortgage Tips

Mortgage Terms 101: Understanding ‘Cash-Out Refinancing’ and How to Determine if It’s Worth It

Mortgage Terms 101: Understanding 'Cash-Out Refinancing' and How to Determine if It's Worth ItWith interest rates remaining near historic lows for the past several years, many of your friends and neighbors may have already told you that they have refinanced their home mortgages once or even a couple of times. A cash-out refinance can provide you with several important benefits, but it is not the best option for all homeowners. By learning more about what a cash-out refinance is and what the pros and cons of this type of refinance loan are, you can make a decision that is best for your current and future plans.

What Is a Cash-Out Refinance?

When you refinance your home mortgage, you can select a rate and term refinance which does not pull equity out of your home, or you can select a cash-out refinance to access some of the equity in your property. You can research your property value and your outstanding principal balance to determine how much equity you have available. Keep in mind that most lenders will not allow you to access all of the equity, and you can obtain more information about the loan amount you may qualify for by speaking with a mortgage professional.

The Benefits of a Cash-Out Refinance

If you decide to apply for a cash-out refinance loan, you may be able to walk away from the closing table with tens of thousands of dollars or more. This is money that you may use for any purpose, including home improvements, paying off high interest rate credit cards, sending the kids to college and more. In addition, you may enjoy other benefits from refinancing, such as lowering your interest rate and mortgage payment and adjusting your loan term to meet long-term goals.

When a Cash-Out Refinance May Not Be Advisable

A cash-out refinance loan can be beneficial, but there are instances when it is not the best solution. The loan will adjust principal reduction, the loan payoff date, the interest charges and other factors. The adjustment of these factors may make your new loan less advantageous for you in some cases, so you should carefully consider the full impact of refinancing before you decide to move forward.

From learning more about the benefits of refinancing to finding a competitive rate for your new mortgage, there are many factors to consider. You can speak with a mortgage professional today to inquire about the cash-out refinance loan terms that you may qualify for and to explore the options in greater detail. If you are thinking about applying for a cash-out home loan, contact a lending representative today.

12
Aug
By support
Home Mortgage Tips

Five Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every Time

Five Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every TimeHomeowners who are struggling to make their monthly mortgage payments can make it easier on themselves by cutting costs in other areas. Learning how to budget effectively will likely enable homeowners to pay their mortgage payments on-time, every time. Here are five of the best budget tips:

Conserve Energy

It is advisable to be mindful of energy use in order to keep utility bills down to a minimum. Lights, televisions and other devices requiring electrical power are best to leave off in unoccupied rooms. It is also a good idea to make sure that windows and doors are properly sealed so that energy is not wasted.

Stay Committed to Couponing

All too often, coupons that arrive in newspapers or through emails are quickly discarded. Collecting coupons from various sources can give homeowners the chance to save big on groceries, entertainment and other everyday purchases. Some of the savviest consumers have been known to spend practically nothing on their purchases by simply staying committed to the art of couponing.

Watch Credit Card Usage

Having a credit card often creates a false sense of financial security. Many card holders are tempted to charge their credit cards up to their limits only to be burdened with high interest rates and inflated minimum payments. Credit cards are best to use only in times of emergencies.

Consider Alternative Transportation Methods

Fuel costs, auto repairs and other expenses associated with driving a vehicle on a frequent basis can make it much harder for homeowners to stay on top of their mortgage payments. People who have access to adequate public transportation may be able to significantly reduce their commute costs. Car sharing services give people the opportunity to use a car on an as-needed basis and often prove to be a smarter alternative to owning a vehicle.

Keep Expense Records

It can also be easier to set money aside for mortgage payments if expenses are carefully monitored with a detailed eye. It is best to closely scrutinize receipts, bank statements and other financial documents for any discrepancies. Keeping track of expenses on a spreadsheet so that all financial information is clearly displayed may be another practical idea.

Smart budgeting practices can help homeowners save the extra money they need to pay their monthly mortgage payments before each due date passes. Contact a local mortgage professional to learn more clever ways to manage money while trying to pay on a mortgage.

05
Aug
By support
Mortagage Tips

The Summer Buying Season Is Here: 3 Tips to Help You Secure a Favorable Mortgage Rate

The Summer Buying Season Is Here 3 Tips to Help You Secure a Favorable Mortgage RateThe best way to ensure you get a good rate on your mortgage is to become an informed buyer. The more you know about mortgages, the more you’ll be able to save, and that doesn’t just mean knowing where to find the best interest rate.

While interest rates play an important role in determining the price of your mortgage, there’s always more to a mortgage than just the interest rate. Here are three things you need to know about mortgages to make sure you secure a favorable rate.

Understand The Fees Involved – And How To Avoid Them

Aside from the interest rate, the biggest factor affecting the price of a mortgage is often the fees involved. These fees won’t always be easy to find, so you might have to do some homework if you want to compare fees charged by different lenders.

Sometimes, it’s possible to have these fees waived or removed. For example, if you end up moving your mortgage from one lender to another, the original lender may have some sort of mortgage pre-payment penalty. You’ll want to make sure the terms of your existing mortgage loan don’t include fees like this before you refinance.

Understand How The “Lock-In” Process Can Affect Your Interest Rate 

When you get a quote for a mortgage, each lender will offer a “lock-in period” in which the lender guarantees the interest rate for your mortgage stays the same. Because interest rates fluctuate so often, this “lock-in period” ensures that you end up paying the same rate you were initially offered should you choose to take out a mortgage with that lender.

If you need a longer lock-in period of two months or more, many lenders will charge a higher interest rate for that provision. For this reason, it’s a good idea to be sure about the closing date of your sale so you can avoid missing out on the lock-in period or being forced to ask for a rate-lock extension.

Understand How Your Credit Score Affects Your Mortgage Rate

Generally, a better credit score means a better mortgage rate, but it’s important that you don’t damage your score while you’re shopping around for mortgages.

Every lender will want to know your credit score and see your credit history. The good news is that every inquiry of the same tyep (mortgage in this case) will only count as a single inquiry on your score.  However, if you have other types of credit pulled, like furniture or auto financing, then too many inquiries into your credit history can lower your credit score.  Your best bet is to hold off on any additional financing until your home purchase loan is completed.

Of course, it’s always important to shop around and compare rates when you’re looking for the best mortgage deal. And now that you know these extra pieces of information about how mortgages work, you should have an easier time differentiating between a good mortgage rate and a bad mortgage rate. A mortgage rate that looks good at first could end up being a bad mortgage rate in the end because of hidden fees and other cost factors.

To learn more about finding the best mortgage rates, give your trusted mortgage professional a call.