Refinance

It’s generally a good time to refinance when mortgage rates are 1% lower than the current rate on your loan, but it is highly dependent on your loan amount and how long you plan to stay in the property. Contact me and I will help you with options.

No. Unless there is a unique situation, you would not refinance if you were moving soon.

Closing costs are similar but less expensive than a purchase due to reduced title charges. There are always costs but you can roll the costs into the loan amount so that you do not have to pay out-of-pocket. You can also reduce the costs by increasing the rate. 

A point is a percentage of the loan amount, or 1-point = 1% of the loan, so one point on a $100,000 loan is $1,000. Points are costs that need to be paid to a lender to get mortgage financing under specified terms. Discount points are fees used to lower the interest rate on a mortgage loan by paying some of this interest up-front. Lenders may refer to costs in terms of basic points in hundredths of a percent, 100 basis points = 1 point, or 1% of the loan amount.

In many cases, a small extra fee will get you a slightly better rate so that is an easy decision. If you need a lower rate to pay for a more expensive home or you need a lower payment, it might make sense to buy down the rate with a larger number of points. It is standard for most loans to include one point which is also called a loan origination fee or discount point. The market changes all the time and I can help you figure out your break-even time frame if you choose to spend a little more for a better rate.

As you go through the loan process, at some point you will need to LOCK your rate. The lock fixes your rate so that underwriting can finalize your approval and you can close with that exact rate. Prior to locking your rate, you are floating with the market meaning the rate can fluctuate daily. In a market where rates are increasing, we will recommend locking your rate as soon as it is allowed. If rates are decreasing, we will recommend that you lock shortly before the closing. In most markets, I will recommend that you lock when we hit an approximate recent low point.

At some point during the loan process, you will have to lock a rate and close with that rate in most cases. I am updated on rates at least 2 times a day. I also get LOCK alerts if news comes out that might roil the markets and send rates higher. I will do my best to advise you as to when you should LOCK the rate. In some rare instances, I will lock the rate before getting your permission. As an example, I locked a client recently that literally could not afford a higher rate. Had I waited, he would no longer have been able to afford the home.

As always, your income and scores and amount down will help me find the best priced program for you! If you have had a bankruptcy, or foreclosure etc., you might need a certain period of time to pass before you are eligible even if your scores are OK. You might also need more down and documentation proving certain things.

Even with lower credit scores, getting a home loan is still possible. I can sometimes use a unique product to help you avoid a higher rate. It is helpful if you have more to put down. If you have very little down, both the rate and the mortgage insurance can be more expensive. As always, your income and scores and amount down will help me find the best priced program for you! FHA programs can work for a variety of low score and low amount down options.

There are two important things to consider when choosing one lender over another one:

• Quality of Service – Especially for first-time home-buyers or files where unique items will come up (more common than you think!) who will have many questions about the total financing process and available loan options. Finding a lender with outstanding service skills that you trust will comfortably guide you every step of the way, so ask questions, even before you fill-out an application. Like me!
• Cost of Services – Most lenders work really hard to be competitive so in most cases costs will be similar. In some rare cases, there will be a big difference, but this is normally due to something very unique. Some lenders will offer a lower rate and higher fees or lower fees and a higher rate and any lender can do this for you.  I also work extra hard to make sure you are getting any bond programs or grants or down payment assistance. This is all done for free, so many lenders do not work hard in this area if they do it at all.