Korene's Blog

In the current market, if you can refinance, you probably should be. Refinancing is the process of obtaining a new loan that pays off your existing home loan. There are several reasons for wanting to do this, but the most important is to get a lower interest rate so you save money on your home loan. Our FHA  and VA loans can help you with streamline refinancing, as well as conventional loans. The key here is to know when it makes sense to refinancing.

What’s Your Rate?

The first step in knowing if it makes sense to refinance is to know what your interest rate currently is. According to Bankrate.com, current 30-year mortgages are available at about 4 percent + or -, which is a very low number. Those who wish to obtain a 15-year loan may even be able to pick up a home loan that is under four percent. If your current mortgage is at an interest rate that is more than 1 to 1.5% higher than these rate, you can save money by refinancing.

Here is an example. Let us say you currently have a mortgage loan payment of $1400 per month and you owe $175,000 on your home and have another 28 years to pay on it. You are currently paying about 9 percent for the mortgage. If you keep this loan for the next 28 years, you will end up paying a total of $304,984 in interest alone, on top of the purchase price of the home.

Now, let us say you refinancing your home loan to a loan for 30 more years and pay 4.25 percent on the loan. Your mortgage payment is now under $900 a month. At the end of your payments, you will have paid just $124,580 in interest payments towards the loan. As you can see, this is much more affordable than holding onto the loan you currently own.

You will likely need to pay some closing costs or we can roll them into the loan amount if your home's appraised value is high enough to cover the mortgaged amount to qualify for a refinance. There are other qualifications you may need to meet as well but we will be pleased to assist you and walk you through the qualification process and the paperwork.  Saving hundred of thousands of dollars in interest payments to someone else is a great way to pay yourself for a few moments of time.

If you are over 62, you may want to consider using a Reverse Mortgage to keep more of your money in your pocket.

To find out if this is an option for you, get a quote from us today.  We are a direct FHA lender. This can further lower your interest rate and make it even more affordable to buy your home.

For all your real estate financing, refinancing, and loan questions, call us at 623-340-0934 or email us at korene@klcsloanteam.com.

To refinance a home loan, contact us, your FHA and VA loan specialists to find out what you qualify for.