There are more and more housing reports telling us that most markets around the country have recovered from the last housing crash of 2007-2009. With values back in the black many homeowners will look to cash out their home’s equity to make improvements to their home, pay off other high interest debt, or send a child to college. So what is the best way to harvest a portion of your home’s equity? When looking around for favorable “cash out” refinance loan terms people often discover that banks hit them hard on the interest rate and they end up paying a premium which means the higher loan amount and higher interest rate yields a higher monthly payment. Now you may be saying that it makes sense they would be facing a higher payment because they are borrowing more money. In some cases that is true depending on their current interest rate. You may also be saying that if someone currently has a low interest rate they should leave their existing first mortgage where it is and go get a fixed second mortgage or home equity line for the cash out portion. This is also true depending on the interest rate they currently have and the value of their home. Often times it’s harder to go get a fixed second mortgage or home equity line behind an existing first mortgage. We now
by Francis Monfort | 28 Aug 2017 | Mortgage Professional America Mortgage rates fell back during the week to their lowest level for the year, Bankrate.com said as it released its weekly national survey. The benchmark 30-year fixed mortgage rate was 4.02%, down from 4.05% last week and tying with the rate last seen June 14, which was the lowest rate since November 2016. The average rate had average discount and origination points of 0.31. The average rate for the larger jumbo 30-year fixed mortgage was 4.03%, while the average 15-year fixed mortgage rate fell to 3.23% from last week’s 3.27% average rate. The latter mortgage type had average points of 0.25. Average rates for adjustable-rate mortgages (ARM) rose this week. The 5-year ARM climbed to 3.50% from 3.49% a week ago and had 0.35 average discount and origination points. The 3-year ARM increased to 3.62% and the 7-year ARM climbed to 3.68%. Bankrate.com said the decrease follows a shift among investors to safe-haven government bonds given high valuations in the stock market. While markets have until recently ignored political and geopolitical issues, they are no longer immune to these developments, the company said. Following recent tensions with North Korea, markets have also been affected by Washington politics and the recent Barcelona terrorist attack. Previously, markets ignored these issues and moved higher given strong corporate earnings, improvements in the economy, and
There’s a brand new loan out there that let’s you payoff your student loans without the typical penalties! Well, to explain the benefits of this loan we first need a little background. Normally, when you refinance to take $ out of your home to payoff anything other than your current mortgage it’s called a Cash-Out Refinance. It’s a perfectly acceptable, common, and even strategically sound way to lower your monthly expenses. BUT, a Cash-Out refi can come with some additional costs in your rate, and limit how much you can borrow. Our new loan now allows you payoff Student Loans thru a refinance with NO Cash penalties! This can be a huge savings. For example you could see rates .375 lower (or more!) on this program. On a $450,000 loan a .375% reduction in rate saves $100/mo. If you add in the potential savings of you already get from rolling in your student loans – the monthly reduction in obligations can be huge. Of course, as with any loan, it’s very important to do some strategic comparisons to make sure it’s the right move. Restructuring debt can be a tricky process and you want to work with someone you trust to give you good advice. If you’d like to learn more about this program, or know someone that would, click here to shoot me a quick email – or just
I may have just missed the student loan debt explosion when I graduated with my undergrad degree in 1998. While college was expensive to attend twenty years ago, we were all borrowing money to get an education, it was nothing compared to the amounts borrowed during the college financing boom of the last fifteen years. Nowadays young people are in record amounts of debt the moment they are handed a diploma which means starting off their earliest earning years with essentially a thirty year mortgage to pay back. College ain’t what it used to be and many times all this borrowed money is for a degree that yields earning power guaranteed to tie up their income for the better part of their career. The student loan income-based repayment plans have been a help to many people. These plans allow monthly payments to be calculated based upon a person’s income which give people a fighting chance to start paying back their loans and be able to eat as well. This is a big deal for those just starting out but there are at least two challenges tied to this calculation. First, the debt will take that much longer to pay off and second when you go to apply for a mortgage the bank approving your application will hit the person for up to 1% of the balance of the
Waiting For Rates to Drop? Now’s the Time! Waiting for Mortgage Rates to drop before pursuing a refinance? Well wait no longer my good friend, now is the time to refi! After the whole Brexit event, rates on home loans dropped, and we’re still not seeing them fully recovered (A good little hack on motoring rates is cheeking in with the 10 year bond. Although it wont tell you what rates are, it will give you a good indication on how they are moving i.e. bond is up, rates are up; bond is down rates are down. Follow the link here to check out where the 10 year bond is at today). So if you were on the fence 6 months ago when rates were good, hop on off cause rates are great and the time is right! For more info on today’s low rates, email me at Scott@GreenMeansGrow.com
Home equity has rebounded. While the U.S. housing market hasn’t completed its rebound, most home values have been rising steadily. That’s certainly good news for homeowners! CoreLogic, a leading provider of consumer, financial and property information, analytics and services to business and government reports that 91.5% of all mortgaged properties in the U.S. are equity-positive. There are 3 ways to access your home’s equity that don’t involve selling your home. The first is to do a cash-out refinance and the second and third come in the form of a home equity line of credit or a second mortgage. All three options mean you are tapping into your home’s precious equity and doing so should only be after careful consideration. We all remember the boom years of the last decade when we saw people harvesting large amounts of equity, some up to 100% of the value, only to find themselves and their home’s value under water a few short years later. Nowadays lending guidelines are much more strict when it comes to accessing your home’s equity so there is protection in place that wasn’t there before. To find out the advantages of a cash-out refinance or home equity line of credit while maintaining your, or even lowering your monthly payments, and preserving your home’s equity click here. By David Hughson (with thanks to John Robinson’s Inspection Group blog post dated 5/14/16) Mortgage
Rent Your Pad on AirBnB? 3 Things You Need to know Before You Refi 05/02/2016 Renting your house or condo out on AirBnB is a great way to bring in a little extra cash to help pay for the mortgage, but did you know there can be serious setbacks if your trying to refinance a property that you rent out on AirBnB? For more info on this, and the three things you need to know about AirBnB and your Pad before you refinance, email me at Scott@GreenMeansGrow.com
In previous posts I’ve mentioned lenders are slowly loosening the death grip they have on credit guidelines. Just this week more lending guideline enhancements were recently released from Fannie Mae and Freddie Mac and it will be interesting to see which lenders jump on board first. I say that because lenders can still impose their own guidelines (they are known in the lending world as “overlays”) on top of the base Fannie/Freddie guidelines. Competition will ferret out the ones willing to follow suit with the big government sponsored enterprises. One of the best enhancements from the recent release is that credit cards can be paid off and remain open. This allows consumers to pay off credit card debt to help them qualify for their home loan or boost their purchase power without closing well-established accounts. Until now borrowers have been able to pay off revolving debt like credit cards and home equity lines but they were required to close them as well. On the surface this may not seem like a big deal. After all, not a day goes by without receiving a new credit card offer in the mail box or inbox. But this is a big deterrent for anyone who has a long established account in good standing because closing an account with good history means you are also closing that long established history. Opening the new account
In addition to an active purchase market we are in the middle of a mini refinance boom right now. Many people are looking to take advantage of their home’s appreciation and the super-low interest rates to improve their repayment terms by refinancing their current home loans. As always is the case credit score plays a big role in determining someone’s final interest rate. What you may not know is that credit-score requirements for home loans are broken down into 20 point tiers. They typically start at 580 and cap out at 740. The tiers start at 580, 600, 620, and so on until you reach 740. While the credit score range is much broader than that (the range is 300-850) what those numbers mean is if you have a credit score lower than 580 we need to spend some time improving/repairing it before you apply for a home loan and if your score is 740+ then there is no need to improve your score prior to applying for a home loan. But what if your credit score is a 671 and you’re wondering what credit score improvement could mean to your final interest rate? How do you start that process prior to applying for a loan? We can show you exactly what to do by running a “what if” simulator. This simulator let’s us run several scenarios that tell you
How to turn that Fixer Home into a GEM! Whether you are purchasing a home or refinancing, if you would like to finance to cost of home renovations into your loan, there are many programs to choose from. Now the real estate market is HOT right now, so buckle up for some competition on those nice looking homes. The days of multiple offers are back, especially on homes that are “turn key” ready. So you may be able to shift your focus to the, somewhat, less desirable homes that may be languishing on the market for some time. Now, before you write an offer on a property utilizing a renovation, you need to be very careful. Make sure a conversation is had with the listing agent BEFORE writing that offer. A renovation loan will take a longer escrow period than regular financing. You will need to obtain bids from contractors and there are a lot more hurdles to jump over for this loan. A 60 day escrow is recommended, but 45 days is not impossible. If you already own a home, this loan program can be utilized through a refinance transaction. It is a very powerful program and gives you the ability to turn your home into your Dream Home! For more information, please contact me, Craig Sutliff, Real Estate Consultant & Mortgage Planner at The GreenHouse Group. Cell: 619-857-4954.
The GreenHouse Group INC is a full service Real Estate & Mortgage Planning Firm located @ 3111 Camino Del Rio North, Suite 400, San Diego, CA 92108. We'd love for you to drop by and say "hello" to us here at our beautiful offices in Mission Valley. Or, if you'd prefer to drop us a line you can call us anytime @ (858) 863-0261. We look forward to meeting you!
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