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Switching Terms with a Refinance

Feb 18
12:55
PM
Category | Blog
Although rates are always changing, as of right now, they have quietly fallen over the past few months. Many people have waited for them to drop before considering a refinance, but now might be to the time to check with your loan officer to get a rate update. Sometimes, a refinance can even make sense if you’re switching from a longer term mortgage to a shorter one. In order to change the terms of your mortgage, you have to refinance. Refinancing is when another lender agrees to buy out your existing mortgage with a new one that has new terms. In order to determine whether refinancing is the right thing for you and your situation, you should consider the following factors first… What New Terms Can You Get? How do the new terms differ from your current terms? The difference in rates is obviously a large factor, but you also want to consider duration, loan type, prepayment penalties, and more. How Much Will You Save? When you stack up your current terms against the potential new mortgage, how much would you really end up saving by refinancing? Make sure you work out the numbers with your loan officer, and don’t forget to account for the closing costs of a refinance mortgage. Follow The Mortgage Rate Projection Will interest rates continue to go down? Have they reached a standstill? You might want to move quickly and make sure you can lock the rate with your mortgage lender. Your Ultimate Goal When deciding whether or not to refinance, the most important thing you need to consider is your overall financial goal. Is this the right time for you and your current situation? Will refinancing help you obtain your ...

When consumers first think of refinancing an existing mortgage loan, typically it’s because there’s new out about falling interest rates. In today’s environment however, especially with mortgage rates being as low as they are for such an extended period of time, refinancing to lower a monthly payment is happening with less and less frequency. But it’s not always just about the current rate on a mortgage compared with market rates. A mortgage refinance can still make sense in New Jersey or other areas in this environment for many. One reason to refinance now would be to consolidate debt. By paying off higher interest debt with a lower rate mortgage loan can save money. The most competitive interest rates are typically those associated with a first lien mortgage. Higher interest rates can be attached to other consumer credit obligations such as credit cards or automobile loans, student loans or home equity lines of credit, or HELOCs. To see if this strategy works for you, take a few moments and gather your most recent credit card and consumer debt statements. List each account, the current balance, minimum monthly payment and interest rate associated with that account. When finished, take a look at the total monthly payments as well as the total outstanding debt. Next, add the amount of these debts to your current mortgage balance. Then, contact your loan officer to get an update on where mortgage rates are today and compare what your new mortgage payment would be if you consolidated all your higher interest debt into a new, cash-out home loan. Consumers can lower their monthly payments with a refinance, or they can take that monthly ...

Mortgage rates rose steadily during the first half of 2018, and have since leveled off a bit. Looking forward, a new round of industry forecasts suggest that mortgage rates in New Jersey and nationwide could hover just below the 5% range for much of 2019. Mortgage Rates Up Since the Start of 2018 On average, mortgage rates have risen by roughly 1% since the start of this year. The average rate for a 30-year fixed home loan was 3.95% during the first week of January, according to Freddie Mac. That average had risen to around 4.94%, as of mid-November 2018. Those who are planning to buy a home next  year are probably wondering: What are mortgage rates in New Jersey expected to do in 2019? Will they rise gradually over the coming months, or continue to hover within their current range? While there’s no way to answer such questions with certainty, a pair of new mortgage rate forecasts have shed some light on the subject. Here’s what the experts are predicting, as of November 2018. Forecasts Predict That Rates Could Hover Just Below 5% No one can predict future rate movements with complete accuracy. There are too many variables involved, and those factors are ever-changing. But there does  seem to be a general consensus among industry analysts. And those forecasts suggest that rates could remain relatively stable over the coming months. The first forecast came from the Mortgage Bankers Association (MBA). Last month, the industry group predicted that the average rate for a 30-year fixed mortgage in New Jersey and nationwide would average as high 5.1% in 2019. The economic research team at Freddie Mac offered a ...

Sorry home buyers. FHA mortgage insurance premiums in New Jersey won’t be reduced anytime soon. That recent announcement came from officials with the Federal Housing Administration. So the mortgage insurance premiums that are currently in place will be carried over to 2019, unchanged. FHA Mortgage Insurance Premiums in 2019 Home buyers in New Jersey who make a relatively small down payment typically have to pay for mortgage insurance. These policies are usually required when the borrower’s loan-to-value (LTV) ratio rises above 80%. There has been some industry “chatter” over the past few months that the Department of Housing and Urban Development (HUD) might lower the FHA mortgage insurance premium that’s required on most FHA loans. That would’ve been a money-saver for home buyers using an FHA loan to buy a house in New Jersey. And there’s a precedent for this kind of thing. FHA insurance premiums have been reduced in the past, most recently during President Obama’s time in office. The Obama-era reductions were scheduled to begin toward the end of January 2017. But they were later reversed by President Trump , shortly after he took office on January 20. The National Association of REALTORS® and other groups have asked HUD to reduce FHA mortgage insurance premiums once more, as they have in the past. But that has yet to happen. In fact, we now have confirmation that such a move isn’t even being considered right now. During a November 2018 phone call with reporters, FHA Commissioner Brian Montgomery said: “We do have to be realistic about the fact that that is still a ...

Mortgage rates in New Jersey and nationwide have leveled off a bit over the past few weeks, and that trend could continue into 2019. Home prices, on the other hand, continue to climb in most of the state. Those are just two of the trends and forecasts that we are monitoring. Here’s an updated look at housing trends for New Jersey, with an outlook stretching into 2019. Mortgage Rates Settle in the 5% Range for Now Last week, Freddie Mac reported the results of its latest survey of the mortgage industry. According to that report, the average rate for a 30-year fixed home loan was 4.94%. That was roughly 1% higher than the first week of 2018. So rates have risen a bit since the start of this year. Looking forward, housing analysts and economists are predicting that mortgage rates could hover within their current range for a while. For example, the economic research team at Freddie Mac recently predicted that 30-year home loan rates would average 5.1% during 2019. The Mortgage Bankers Association (an industry group) issued a nearly identical forecast in October, suggesting that rates would hover in the low 5% range throughout next year. Note:  The trends and forecasts mentioned above pertain to industry-wide averages . The actual interest rate assigned to home loans can vary due to a number of factors (the type of mortgage loan being used, the borrower’s qualifications, etc.). Please contact us if you would like a quote tailored to your specific situation. Home Prices Keep Rising Across Much of New Jersey The general consensus among experts is that mortgage rates could level off over the coming months. But home prices ...

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