1. A Lower Fixed Rate - In real dollars per month, when we consider that many people out there who are holding a 30 year fixed rate from the last Refinance Boom of 2005 will have an interest rate of around 6.00% to 6.75%. On a 400,000 loan amount at say 6.375% that equals a monthly payment of 2,495.48. Now, moving forward with a refinance in 2009 a very realistic .750% reduction (less than 1%) in the rate of interest will reduce those payments by 224.33 and so when you "road map" those savings over the next 15 years that is over 40,000 in interest costs that the consumer saved in just one area of their budget!
2. My Loan contains a Variable Rate Feature - The key on these is (a) what kind of Variable Feature do you have? and (b) Understanding when it changes - how will that impact your monthly payment? The fact that you have a Variable Feature is nothing to be fearful about. You simply need a basic understanding of how the changes are structured and knowing that - you can then better decide how best to either get out of the loan you have or stay with the loan you have. If you review your Note from your loan documents, the complete outline of "the how and when" is contained on those pages.
3. Lowering my Mortgage Payment & Beyond - The beyond part is simply taking the amount of savings you end up with on your refinance and putting those saved dollars to good use, like reducing a credit card, helping out a family member with expenses or simply placing it into a savings or investment account, this is a major benefit of the refinance process that I think deep down most everyone in their heart is seeking to have.
4. What about a Fixed 5 year Term? - I love these when they are low. The reason is that you can typically obtain a 5 year fixed term in the mid 4's at the same time that the 30 year fixed terms are in the low to mid 5's. You should have a strategy at work in looking at the 5 year fixed term versus the typical 30 year fixed term, let me explain. The 5 year fixed term I am referring to is a 30 year loan with a fixed rate in the "first five years of the loan" and then it turns into a variable loan for the remaining 25 years. In the example up above you could be saving double the monthly amount since these loans offer a lower rate over the fixed 30 year loan terms. The strategy is that you (a) really need to obtain the lowest rate possible without a very risky loan and or (b) you may not be staying in the home for more than 5 years and therefore you want to enjoy the maximum savings possible before that event takes place.
5. Buying a Rental Home - What about That? - There is no question that there are great buying opportunities out there in this 2009 economy however the lending guidelines are much tighter than ever before with today's underwriting through Fannie Mae & Freddie Mac. A 20% down payment is the "norm" and you must know the reason why you are investing. Why do you want to do this? When & How do you plan to get out?. You need to nail down your expectations in these two areas well ahead of a planned attempt on an offer to purchase. The reason I bring this up is because about 50% or more of the foreclosure market that is getting "hammered" in our great American Cities is a direct result of borrowers who bought not one, not two, but three or more Rental Houses with the sole intent of keeping them for a short ride and making a nice profit in two or less years.
Wade is a Successful Mortgage Specialist with extensive experience in originating, processing and fulfilling underwriting requirements to close and fund loans. Wade has a strong work ethic, consistently producing through all economic upturns and downturns. Wade's problem solving techniques, extensive knowledge of investor products and guidelines along with his ability to lead others in achieving their financial goals means he does care about making certain you are receiving the utmost of care, concern and integrity throughout the loan process.
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