When you divvy up your monthly budget pie, housing is very likely the biggest slice, especially after you add in utilities, maintenance and of course, your mortgage.
I frequently have people ask me for “one of those no-cost refi’s”. Some people think that mortgage lenders are so hard up for business that they are willing to lose money and simply pay the closing costs for the mortgage borrower. I don’t know of any businesses where losing money is part of the process of making money. A no-cost refi actually comes with a cost…a higher interest rate.
Interest rates rose after the presidential election. The news from the bond market according to MBS Online was “Trump has advocated for greater spending on defense and infrastructure, and at the same time he proposes to cut taxes. These policies raise the prospects for increased deficits and inflation, neither of which are good for mortgage rates.”1
Recently rates have come back down a bit. Rates are Read the rest of this entry »
Refinancing doesn’t save you money unless you calculate in the interest that you’ve already paid. Especially when you think you’ll own the house for the long haul or forever. If you pay $2,500 a month in principal and interest, you are going to pay $900,000 over the life of a 30-year mortgage. If you are 4 years into the loan and are going to refinance to a principal and interest payment of $2,800 you are going to save $200 a month, correct? Wrong! Read the rest of this entry »
The Home Affordable Refinance Program (HARP) is a mortgage assistance program, set up by the Federal Housing Finance Agency in March 2009 to help underwater and near-underwater homeowners refinance their mortgages.
After the housing market crash in 2009 many homeowners were faced with a situation where their house was considered “underwater”. In this scenario, the house value was less than the mortgage loan cost, in other words, having a negative equity value in the home. Refinancing was not an option, nor was selling the home unless they paid the lender for the difference. Unfortunately, this lead many homeowners into foreclosure. Read the rest of this entry »
In a word, no. This is not possible. I wrote a blog back in 2011 in another feverish refinance market showing the numbers on how you can’t shorten the term of your loan from 30 to 15 years without increasing your monthly mortgage payment. Those numbers bear repeating in the current interest rate climate and are below. Check out this hypothetical example: Read the rest of this entry »
There was an article recently on TechCrunch.com that was titled “This Could Be The Mortgage Industry’s iPhone Moment” that proclaimed “Quicken Loans sees Rocket Mortgage as the turning point in home financing” and “It’s home financing’s iPhone”, and “The process takes less than 10 minutes.” Hmmm, we’ll see about that. Read the rest of this entry »
Actually, the refinance boom is indeed over; however, there are a fair amount of people that still need to refinance. For example, I know of many people who have decided to move sooner than they imagined. I hear of consumers who thought that they would live in their homes for the long haul, but then due to circumstances that were a surprise to them, they have now decided to leave in the next few years. Let me give Read the rest of this entry »
Actually, the refinance boom is indeed over; however, there are a fair amount of people that still need to refinance. For example, I know of many people who have excellent interest rates on a 15-Year fixed rate mortgage because they thought they would be in their home forever and wanted to get the mortgage paid off over a shorter term, but now have suffered a job setback or some other sort of financial blow, and need to revert to a 30-Year mortgage to reduce the monthly payment. Let me give Read the rest of this entry »
Actually, the refinance boom is indeed over; however, there are a fair amount of people that still need to refinance. For example, I know of many people who have excellent interest rates on their 30-Year fixed rate mortgages, and plan to be in their home for a long time or possibly forever. These people should consider giving up their low 30-Year fixed rate, and get a still quite low 15-Year fixed rate, and save a small fortune over time. Let me give Read the rest of this entry »