12
Jan
By First Rate Financial Group
Home Buyer Tips

Should I Shorten My Mortgage Term, Important Factors To Consider

Should I Shorten My Mortgage Term, Important Factors To ConsiderWhen you first bought your home a few years ago, perhaps you started off with a 30 year mortgage. Now, you are considering refinancing and changing it to a 20 year or even a 15 year mortgage.

Shortening your mortgage term and refinancing can be a smart financial move, but before you make this decision there are a number of factors that you should consider.

Switching to a shorter mortgage will mean that your monthly payments will be higher, but you will be 100% paid off much sooner and you will save thousands of dollars in interest rates. Here are a few of the factors to consider before making this decision:

Has Your Situation Improved?

Perhaps you have moved to a higher paying position, allowing you to earn a higher income and pay off more of your mortgage every month? Or maybe you have received an inheritance, which will help you to make the payments? Perhaps your expenses have gone down and you will have more money left over from your wage?

Whatever the reason, if your financial situation has improved you might want to consider switching to a shorter mortgage. With your spare money, you will be able to make the larger payments and get your house paid off sooner.

Is The Improvement Long Term?

However, it is important to consider whether this improvement will last for the long term. Will your higher wage stay that way for the next several years? Are there any hidden expenses that you are failing to factor in?

You might be set up to repay larger monthly amounts on your mortgage at the moment, but you don’t want to set yourself up for failure in the future if your finances change.

What Are The Refinancing Costs?

Keep in mind that refinancing often comes with costs and fees, so make sure that you subtract these when you are making your calculations. It can sometimes take at least two or three years to recoup the fees, so make sure that you don’t plan on selling your home in the short term.

Can You Get A Better Rate?

One of the advantages of refinancing to a shorter mortgage is that you can sometimes get the opportunity to find a better rate. Perhaps if you have an adjustable rate you will be able to convert it to a fixed rate. Take a look at what is available and ask your financial advisor for help.

These are just a few important factors to consider when it comes to shortening your mortgage term. For more info about your home, contact your trusted mortgage professional.

28
Dec
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – December 28, 2020

Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly average mortgage rates were also released, but readings for jobless claims were not released due to the Christmas holiday. Single-Family Home Sales Fall in November Sales of new and previously owned homes were lower in November. Fear of rising covid-19 cases and the usual slump in home sales during the winter holidays contributed to fewer home sales. Rapidly rising home prices cooled buyer interest; short supplies of pre-owned homes for sale drove prices of new homes higher as demand increased. Inventory of new homes increased by 14 percent as the median price of a new single-family home rose to $335,000, which was five percent higher year-over-year. George Ratiu, a senior economist with Realtor.com, said that would-be homebuyers were dealing with an increased divide between their home-buying preferences and affordability. Rising materials costs continued to drive new home prices up; builders faced challenges in constructing affordable homes due to higher materials costs and lower profit margins. November sales of previously-owned homes were lower with 6.69 million sales reported on a seasonally-adjusted annual basis as compared to October’s reading of 6.86 million sales. Short inventories of available pre-owned homes caused a dip in sales as buyers competed for fewer available homes. Shortages of available homes are expected to persist into 2021 and to drive home prices higher. Affordability will challenge many buyers even as mortgage rates remain at or near record lows. Mortgage Rates Lower Rates for fixed-rate mortgages dipped last week according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage was one basis point lower at 2.66 percent; rates for 15-year fixed-rate mortgages averaged 2.19 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.50 percent for 15-year fixed-rate mortgages, and 0.20 percent for 5/1 adjustable rate mortgages. The University of Michigan reported a lower index reading of 80.7 for December as compared to an expected reading of 81.0 and November’s reading of 76.9. A post-Thanksgiving surge in Covid-19 cases caused consumer sentiment to fall. What’s Next This week’s scheduled economic readings include Case-Shiller’s Housing Market Indices, pending home sales, and weekly readings on mortgage rates and jobless claims. Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly average mortgage rates were also released, but readings for jobless claims were not released due to the Christmas holiday.

Single-Family Home Sales Fall in November

Sales of new and previously owned homes were lower in November. Fear of rising covid-19 cases and the usual slump in home sales during the winter holidays contributed to fewer home sales. Rapidly rising home prices cooled buyer interest; short supplies of pre-owned homes for sale drove prices of new homes higher as demand increased.

Inventory of new homes increased by 14 percent as the median price of a new single-family home rose to $335,000, which was five percent higher year-over-year. George Ratiu, a senior economist with Realtor.com, said that would-be homebuyers were dealing with an increased divide between their home-buying preferences and affordability.

Rising materials costs continued to drive new home prices up; builders faced challenges in constructing affordable homes due to higher materials costs and lower profit margins.

November sales of previously-owned homes were lower with 6.69 million sales reported on a seasonally-adjusted annual basis as compared to October’s reading of 6.86 million sales. Short inventories of available pre-owned homes caused a dip in sales as buyers competed for fewer available homes. Shortages of available homes are expected to persist into 2021 and to drive home prices higher. Affordability will challenge many buyers even as mortgage rates remain at or near record lows.

Mortgage Rates Lower

Rates for fixed-rate mortgages dipped last week according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage was one basis point lower at 2.66 percent; rates for 15-year fixed-rate mortgages averaged 2.19 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.50 percent for 15-year fixed-rate mortgages,  and 0.20 percent for 5/1 adjustable rate mortgages.

The University of Michigan reported a lower index reading of 80.7 for December as compared to an expected reading of 81.0 and November’s reading of 76.9. A post-Thanksgiving surge in Covid-19 cases caused consumer sentiment to fall.

What’s Next

This week’s scheduled economic readings include Case-Shiller’s Housing Market Indices, pending home sales, and weekly readings on mortgage rates and jobless claims.

03
Nov
By First Rate Financial Group
Mortgage

How To Negotiate A Better Mortgage Rate

How To Negotiate A Better Mortgage RateFor those who are thinking about buying a house in the near future, they want to make sure that they get the best mortgage rate possible. At the same time, if people who want to reduce the interest rate on their mortgage, then they need to do everything you can to make yourself as attractive as possible to lenders. When they are negotiating for a better rate on your mortgage, they need to keep a few important points in mind.

Make A Larger Down Payment

If people want the lender to reduce the interest rate on your mortgage, then borrowers need to think about making a larger down payment. By doing everything they can to reduce the risk they present to the lender, they will be rewarded with a lower interest rate. If borrowers are willing to put more money down, then that is less money that the bank has to lend out. Therefore, the risk the bank takes on is going to be reduced and borrowers will be rewarded with a lower interest rate. Make a larger down payment to reduce the interest rate on the mortgage.

Improve the Credit Score

Another way that people can reduce the risk that they present to the bank is to improve their credit score. What can borrowers do to make this happen? They can check your credit report first and correct any inaccuracies that might be present. After this, they should take a look at any existing debt they have and try to pay down as much of it as possible. By reducing the amount of debt they owe, the credit score will improve, helping them qualify for a lower interest rate on their mortgage.

Take Advantage Of Discount Points

Those want to reduce the interest rate on your mortgage, could use something called discount points. These are points that the borrower will pay directly to the lender in exchange for a lower interest rate. By providing the lender with more money up front, they can secure a reduced payment over the life of the loan.

Reduce the Interest Rate

These are a few of the fastest ways that people can secure a lower interest rate on their loan. This can save them a tremendous amount of money.