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.
The mortgage industry has been experiencing an amazing year so far. The Federal Reserve (FED) has continued to cut rates. Need proof? Last week the FED dropped rates another quarter percent, we are currently hovering at a 2-2.25% rate.
What does that mean for you?
Well if you are looking to purchase you have the ability to buy more home for your money; however, if you are looking to refinance you are looking at saving money over the life of your loan, on top of potentially being able to lower your term.
Refinancing is one of the various ways you can utilize to help save money overall; however, if you find yourself needing alternative options and are looking to be proactive in your home financing needs, here are a few out-of-box ideas.
- Buy a Cheaper House – this is self-explanatory, learning to live below your means is a valuable lesson to learn and helps you budget more efficiently.
- Choose a Bi-Weekly Payment Option – Most loan servicers provide this option. When you choose to go this route, you end up making 26 payments a year; which adds up to you paying 1 extra payment towards your principle each year.
- Choose an ARM – this option is great if you don’t plan on living in your home very long. What’s the point of fixing yourself in a 30-year term if this isn’t your forever home?
- Extend Your Repayment Term – Example if you are in a 15-year term you can switch to a 30-year; this doesn’t change the amount of your loan but will overall lower your payments because you are extending the term.
- Make a Larger Down Payment – This option would make your parents feel like you are listening to them. You grew up with them harping you to save for a 20% down payment and there is a good reason why: it helps keep your monthly mortgage payment LOW.
- Get Rid of Your PMI – this option takes some time if your purchasing and your sellers don’t want to pay this off while negotiating. To be able to get rid of your PMI you must gain at least 20% equity in your home; once you achieve that you can request that your lender drop PMI.
- Pay for Points – when you pay for points you are paying for a lower interest rate. There may be more you pay for upfront in closing costs; however, over the term of your loan you aren’t acquiring unnecessary interest.
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.
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!
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This week mortgage interest rates have hit historical marks by reaching three-year lows. This significant marker of low rates comes just two months after The Federal Reserve announced rates have fallen and are not anticipated to rise again for the remainder of 2019. Low rates in conjunction with a surplus of home sales, the housing market is expected to continue to improve and show favorable conditions. Not only are the lower rates good news for potential homebuyers that are looking to enter into the market, but also continues to open opportunities to homeowners that are looking to refinance.
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Scary, right? If you are here, you probably were looking for ways to help yourself get out of this situation and for that we are grateful you are here!
Don’t know where to start? Believe it or not, the first person you should call is your lender. It is a common misconception that your lender wants to see you fail – quite the opposite actually – we want to see you living in your dream home for years to come. So, we beg you, please give us a call.
After calling your lender here are a few steps to getting back on track:
- Be honest with WHY you’ve fallen behind.
What happened? Being honest with your lender can help them assist you in making the best plan of action for your situation.
- Be ENGAGED with your solution plan
Your individual plan on getting you back on track will not work if you aren’t willing to be disciplined in the little details of your plan.
Whether it’s refinancing to get you in a lower payment, helping you get a principal reduction or putting your mortgage in forbearance for a period of time; we want to remind you that owning a home is one of the greatest privileges we are able to achieve and there are options out there to better serve you and your family.