Real Estate News with Terri Taydus, GRI, CNA

Is Refinancing Right for You? Re-Evaluating Your Current Financing

June 13th, 2014 2:46 PM by Taydus Taydus

Most of you have rates either near or below 4 percent.  If your rate is at or below 4.625% there is little benefit to refinancing unless you have a large loan balance so do not believe what you hear in the media.

However, there are other reasons to evaluate your options because you can benefit from the increase in property values over the last two years.  Some are saying that we have experienced a 16% increase in the last 12 months alone.

The people that will benefit the most are individuals that have mortgage insurance.  You can petition for the mortgage insurance to be removed if you have a 20% equity position in your home.  The cost is minimal and the savings potentially significant.  You can check with your Realtor and ask them about the current valuation of your property.

Those of you with 1st and 2nd mortgages may want to consolidate into one loan depending on how long you plan on owning your home and the size of the second mortgage.  The larger the second the more likely you should refinance because of the higher exposure to the rate adjusting upward.

Debt consolidation is another reason to consider a refinance. With the high interest rate on credit cards it is virtually impossible to get ahead so take advantage of the equity and consolidate into tax deductible financing at a much lower rate.  Debt consolidation is a smart financial move.  The past problems with cash out refinances that occurred in the last decade were because people were leveraging themselves up to 100%.  In today’s market most major lenders cap cash out refinances at 85% with a minimum credit score of 700.  The higher the LTV (Loan to Value) and the lower the credit score the higher the rate you will end up getting.

The last group that needs to start planning are those of you with adjustable rate mortgages.  You may have another year or two to enjoy the low rates but when they start moving upwards they may move quickly which is typically the case and then it is too late.  It is a good idea to at least start a dialogue at this time so that I can notify you when things start to move upward.

I am more than happy to review your financing and give you honest advice.  If you have friends or family that may benefit from this information please pass my name on to them.  I assure you that they will thank you for the recommendation.

Information provided by Joe Taydus at Mutual Security Mortgage.  If you have any questions or would like more information regarding refinancing your home please contact Joe at (303) 443-5575

Posted by Taydus Taydus on June 13th, 2014 2:46 PM


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