Spring has not sprung in Michigan just yet!
With the weather in a holding pattern and most Michiganders working from home, now is the perfect time to prepare your funds for when the weather breaks. Rather you are planning a trip in the upcoming season, and need to take cash-out or wanting to do a “spring cleaning” on those high-interest credit cards, refinancing your mortgage can put you in a much better financial position.
Here are 4 reasons you should refinance before spring:
Get rid of unwanted high-interest credit card debt
While having credit cards make purchasing high priced items a breeze, having to pay the monthly minimum on a card with high interest can be daunting. Paying on the interest and not the principle is just band-aiding over the problem and will send you further into debt. That doesn’t have to be you! The good news is that if you refinance right now, you can pay off your credit card completely and go into spring debt-free.
Cash is king! With the weather warming up comes the opportunity to take advantage of spring home improvement projects. Don’t use your tax return to fund building a new porch or a patio. Instead, you can simply refinance and take cash out of your home’s equity. Taking cash-out can also be spent on planning a nice spring or summer vacation without the stress of going into debt to do so.
Lower your monthly mortgage payment
What is better than not having to use credit cards? Cash! Even with a few weeks left of winter, you can still close on the refinance of your home loan before spring! Lowering your monthly mortgage payment means more cash in your pocket.
Rates are low
You’ve heard us say it for the last several months and its true, RATES ARE STILL HISTORICALLY LOW. Rates are the lowest they have been in a decade. The reason you need to act now is because we don’t know when rates will rise again. The housing market can be very unpredictable… take advantage today and contact one of our mortgage experts to receive a free 5-minute mortgage review.
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As you know the Federal Reserve just announced that interest rates are holding steady! The goal of the committee is to maintain the target range for the Federal funds rate. This is to support the expansion of economic activity, strong labor market conditions, and favorable inflation.
Why should YOU pay attention to this?
A couple of reasons:
- You’ll be informed on the state of the economy
- You’ll gain knowledge on the state of the job industry
- Paying attention will keep you up to date on the rate of inflation
- If you own a home, it lets you know if you can be saving money by refinancing to get a better interest rate
- If you are looking to purchase a new home, you want to purchase while rates are low
The next meeting is on March 17th & 18th.
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Buying home is one of the biggest commitments you will ever make. Not to mention it is pricey, time-consuming and can be very intimidating. If you are a first-time homebuyer and don’t know where to start, these 3 tips could help you prepare yourself for the process.
Tip #1: Be picky about your Mortgage Lender
This is a major purchase and commitment! You need to be completely comfortable with your lender. Find a lender that is in tuned to your request, concerns and anxieties. You should never feel like you are being pitched some sales tactic and what you feel doesn’t matter. You will spend many long hours communicating with this company and they should be all about catering to you and showing you MORE PERSONAL ATTENTION.
Tip #2: Take your time!
The mortgage process can be extremely daunting. From picking a real estate agent, to your dream home, to the mortgage lender…there is a lot of decisions to make and you shouldn’t rush making any of them! Take your time throughout this entire process. If you aren’t loving the way your real estate agent is communicating with you, get a new one. Or you aren’t loving any of the houses in the current market for sale, wait till you find what you want!
Tip #3: Have money saved
Not only is it nice to have a good amount of cash saved for your down payment but, there are tons of other expenses to consider. Once you get approved for that new home, you are going to want to furnish it and fill it with things you like! Also, since buying a home is so expensive, you need buffer money, just in case some random expense occurs.
Recent studies have shown that 93% of homeowners say that having a house makes them happier than renting did.
Why is that?
Experts are coining it “The Homeownership Effect” explaining that owning a home can make you a better person because you naturally find yourself enjoying new hobbies like gardening, landscaping, cooking, and if you are a big spender maybe even remodeling.
Besides allowing you to find and create more hobbies for yourself, it has been said by the Consumer Financial Protection Bureau, that owning a home helps with financial responsibility and overall better well-being. These can be attributed to homeowners living in an affordable, comfortable home located in a connected neighborhood with a reasonable commute.
However, don’t think that owning a home is the magic key to happiness. There does take a level of preparation and making sure you can comfortably afford things like property taxes, insurance, and unexpected (but relatively normal) home repairs. If you are curious whether or not your family is ready for this next step – click here – to talk with someone today about your current situation.
Even though summer is coming to a close and purchase season is slowing down. Freddie Mac reported that the average interest rate for a 30-year fixed rate dropped to another 3-year low at 3.49%. And as the unemployment rate remains historically low, this means that homebuyer demand is improving along with affordability.
August brought some significant good news, so take a deep breath and find solace in our current economy. Why? Fannie Mae is also predicting that the economy should continue to support the current refinance activity. How do we know that? August’s refinance volume was 150% higher than it was last year, which is in correlation to the increase in the demand for homes and affordability.
And if you are still thinking about refinancing know that Black Knight is here to tell us that roughly half of the homeowners across the United States are sitting on a combined total of 6.3 trillion dollars in tappable equity. We haven’t seen eligibility this high since the early 2000s.
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It is no secret that times have changed since our grandparents and even our parents have purchased homes. So much so, that with new programs and requirements, brokers/lenders have stated, you aren’t required to have the 20% down payment that you heard about growing up.
But now you are thinking… how much should I save for a down payment?
Here’s the good news it doesn’t have to be difficult, and you can do what works best for you and your family. To put it in perspective, if we were still required to put down 20% on a home loan, based on Mr. Cooper’s math, it would take renters nearly seven years to save for a 200K home on an average salary of 56K a year. Seven years!
However, there is a benefit to putting 20% down.
1. Right away, there is more equity in your home.
2. Lower monthly payment.
3. Lower rates.
4. You aren’t that high of a risk to your lender.
5. You won’t need mortgage insurance.
6. Future buying power.
Click here to calculate your ideal mortgage down payment.
Last week the Federal Reserve made the decision to cut rates for the first time since 2008. With wages on the rise and unemployment rates at a 50-year low, the decision was made to help boost the economy. This means potential savings for homeowners across America looking to refinance or sell their home since home equity is also on the rise.
*These numbers are based on the weekly average data pulled in from Freddie Mac
With rates being at their lowest point in 3 years, now is an optimal time to purchase and refinance. We want you to take full advantage of the housing market’s favorable conditions!
Give us a call for a free 5-minute mortgage review!