How About a Little Service with those Low Mortgage Refinance Rates?

Sometimes, we in the home loan mortgage refinance business tend to spout out at the mouth about the current state of interest rates, program options, loan scenarios, and on and on, yet customer service is rarely mentioned. Yes, this is extremely important, yet an often overlooked aspect of the borrower’s refinance lender decision.

Quality home loan lender service is crucial to both the mortgage pre-qualification stage, as well as the actual loan process stage.

Sometimes, a loan officer will act more as an order taker than an actual advisor. Either through inexperience or the “Asking Less Leads to More Sales” approach, the borrowing customer is really short-changed and may not even know it.

Ideally, you want to work with a loan advisor that will take an interest in your financial goals and ask questions about your loan scenario. Many times, there is a much better program for your particular objective and timeframes that can go undiscovered because of an order-taker mentality. I don’t know about you, but throwing up to tens of thousands of dollars out the window would get me a little hot and bothered, when a few extra questions would have made the difference.

Good service also means answering all customer questions in a courteous and timely manner, discussing possible loan scenarios is your appraisal comes in at X, instead of Y, preparing breakeven analysis and total benefit reports, and relaying your home loan options in a clear to understand manner.

I can’t tell you the number of people that call the Refinance Toolbox, complaining that an advisor with Lender X will not answer their phone or email. Let alone the number of times a homeowner has been pre-qualified with bad or even “unrealistic” loan programs.

In the loan processing stage, you want your lender to run like a well-oiled machine. This does not mean that unforeseen loan issues won’t arise, appraisals will come in perfectly, etc., in every case. It means that your lender will have a clear and concise loan process initiated by experienced and trained staff for your particular loan product. It also means that you have total access to your loan process, loan advisor and processor …. You should be informed during your home loan process.

So how do you tell if you’re speaking with an order-taker or the real deal? If your loan advisor did not already explain their mortgage experience, give you a thorough pre-qualification, and explain their company loan process, just Ask!

Your home loan refinance is a huge decision, so you want to make sure that you have as much information as possible about your potential new mortgage lender. You Deserve It!

If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.

May the Mortgage Refinance Rates be with You!

Refinance Tool Box

Refinancing Into a Lower Term Mortgage Can be a Great Investment

Everyone wants a great high yielding and low risk investment opportunity, but seldom does one think of a home mortgage in that light. Yet, for many homeowners, refinancing into a lower term mortgage can be a great long-term investment strategy, especially when refinance rates are as low as they are currently.

For instance, suppose you currently have a 6.5% 30 year fixed rate mortgage that you took out 2 years ago. The total interest on that loan over the entire term of the loan amounts to $318,861, of which you have already paid $32,000.

Now, if you refinanced into a $250,000 15 year fixed rate mortgage at 4.5%, the total interest on your new home loan would only amount to $94,247 over the 15 year term.

So lets recap. The 30 year interest of $318,861 less the $32,000 already paid less the $94,247 total interest for the 15 year fixed mortgage results in a net interest savings of $192,614 by refinancing to the 15 year option.

Now you might say that is better than grits and gravy, but the payment goes up. In this example the monthly payment would increase by $332.

Most people scoff at the idea of increasing their mortgage payment, but I would suggest that you consider it an investment and a Great Deal!

Think about it. We may never see the current historic low interest rates ever again after we dig out of this national economic mess.

In this example, which is pretty typical, the homeowner would be investing in a sure $192,614 profit by paying an additional $322 per month into their own home! Better yet, the IRS is not going to take 50% nor 28% nor 15% of that profit …. Wer’e talking a tax-free investment!

I don’t know about you, but I seldom run into such safe and prosperous tax-free investment opportunities.

Not to mention that your mortgage paying days will be over in 15 years as opposed to 28 years. For those in their 20’s, that may not seem like an issue, but the prospect becomes much more important to those over 30 years old.

All that said, there is a risk to this investment strategy. If you cannot make the increased monthly payment, then you can run into a major problem and possibly risk losing your home.

It is ultra-important that you can make the increased payment comfortably. Even if the qualifying debt ratios say that you are good, you need to make a real-world assessment considering your current employment and monthly budget.

If the budget checks out, then you could be on your way to making one of the best investment decisions of your life by refinancing into a shorter term home loan while mortgage refinance rates are so low.

If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.

May the Mortgage Refinance Rates be with You!

Refinance Tool Box

Cost of Waiting for Lower Mortgage Refinance Rates

If you have been following mortgage refinance rates over the past month, you will have noticed that rates have dropped to near the historic low levels experienced earlier this year. Many refinancing homeowners that sat on the fence earlier this year have been quick to jump in on this latest mortgage rate drop and lock their loan.

Yet, there are others that are waiting to refinance in the event that interest rates drop even further. This is fine strategy if current refinance rates are not creating a benefit that will help you much. But for those sitting on a significant financial benefit at current rates, this could end up costing you up to tens of thousands of dollars in the long run, even if you do eventually refinance at a lower-than current interest rate down the road.

For example, suppose that you currently have a 1st and a 2nd mortgage totaling $250,000 that you want to refinance into one low fixed rate 30-Year home loan. Your current combined principle and interest (P&I) monthly payment is $1,622. You can refinance today at 5.0%, which would result in a new P&I payment of $1,342. Your total monthly savings would be $280.

You hold off on your refinance plans because a so-called “expert” on CNBC says that rates could go down further in 2010 (no one knows where rates will go next week, let alone in 6 months to a year!).

Now, assuming that things go your way and mortgage refinance rates do drop to 4.75% 6 months down the road your new P&I payment would be $1,304 per month. You will then be in a deal that is $38 per month better than if you had locked 6 months earlier. That’s great, but don’t forget that you had a $280 benefit 6 months ago, so you lost out on $1,680 in savings. It will take you 44 months to make up the difference ($1,680 divided by $38).

Is that really worth the risk? Suppose interest rates actually go up from here or take a year to drop to 4.75%? (In which case, it would now take 88 months to make up the initial savings difference).

What if things don’t go your way and refinance rates go up and don’t retreat back to even 5.0%? If you hold off on locking for a better deal and never end up refinancing, it will have cost you $100,800 in lost savings over the term of the current-rate proposed loan in this example.

Hey, everyone wants to get in at the absolute bottom, whether it be the stock market or mortgage refinance rates, but the truth of the matter is that few ever do. And the ones that do get in at the bottom can mostly be attributed to blind luck.

The moral of the story is that if you are staring at a significant financial gain with current historic low mortgage refinance rates, be very careful about holding your rate lock decision for hopes of lower interest rates. It could cost you dearly in the long-run.

If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.

Refinance Tool Box

May the Mortgage Refinance Rates be with You!

Mortgage Refinance Rates Still Near 5.0 Percent

The steadiness of mortgage refinance rates over the past month or so has been a welcome change from the interest rate roller coaster ride experienced over the past couple of years. In fact, we are now near the historic low home loan rates of Spring 2009.

There seems to be a standstill at the moment as the unsettled economy is drawing investors into and out of the security of treasury bonds, maintaining the low yield in a tight range and keeping refinance mortgage rates a nice bargain.

Home values and credit scores continue to be the major determining factor for qualification into these great rates. FHA refinance home loans continue to offer low rates to those with credit scores as low as a 620 mid fico and you can have a loan-to-value (LTV) ratio up to 97 percent.

For those looking for conventional loans with no PMI, your home value will be critical. Don’t forget to include your closing costs into your total loan amount in calculating your qualifying LTV if you are not paying for closing costs out of pocket. You will need to be at an 80 percent LTV or lower to eliminate PMI.

The housing value picture is still muddied, but looks a whole heck of a lot better than it did even a few months ago. The latest home sales numbers have been rather positive and we have even experienced home values increasing in many markets…. Hip Hip Hooray!!

Now, before we pop the cork on the champagne, there are also some troubling housing market variables that lurk around the corner. There are apparently a huge number of distressed homes waiting to hit the sales market. Banks have been holding these foreclosed homes for various reasons, but they could soon hit the sales listings. This could be a big hit to an already unsettled outlook.

Not to mention the jobs picture. Unemployment numbers continue rise as corporations work to improve their balance sheets. This is also putting a damper on housing activity.

If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.

May the Mortgage Refinance Rates be with You!

Refinance Tool Box