by CRESTICO | Feb 3, 2009 | CRESTICO
Economic times seem troubling. But they don’t have to be, not for everyone! Mortgage rates are low and can be translated into super savings for borrowers who qualify. But there are some things you must know before you decide whether or not to refinance in the current market!
Before you even consider Refinancing, you have to think about what you are refinancing. Many Americans have lost all of their equity, Zillow estimates that 1 in 7 American homeowners have negative equity in their homes. Generally, you will need at least 3 percent equity in your home to refinance. If you do not have three percent, refinancing may not be an option for you.
It’s not as easy as you think. Most people’s applications will not be approved. The economy is in a state of turmoil and this trickles down and affects everyone. Many lenders are not making it easy to refinance.
Another consideration is your FICO score. You will most likely need a score of 740 and above to be able to secure some the best rates of the market. It may not be worth financing, even if you get approved and your FICO is less than 740 because you may be paying a higher rate.
Next, even though it seems that the rates are unbeatable, you will have to carefully think about your finances when you are considering refinancing. First, I suggest you take a look at your current rate. What is it? If your rate is about 6%, perhaps it may be a good time to refinance, since your rate is more than one whole point above the market’s current rates. Also, keep in mind rates for loans above the current FHA limit ($729,000) will have much higher rates than those within the FHA limit. Another thing you must consider are fees. The more you pay in fees, the less you are saving, even at a lower rate. Calculate how much you will be saving with the lower rate and if you can recover what you pay in fees in three years or less, then refinancing may be right for you.
The fees that you will have to pay vary, however you have options when it comes to paying these fees. You may want to pay cash for these fees, take a higher interest rate for lower fees, or simply add the fees into your mortgage. You will need to talk to your mortgage specialist and he/she will provide you with the best advice for your situation.
Shopping. The best way to get the best rate and the best deal is to go shopping. If one lender says "No" that does not mean that no lender will refinance you. The era of the mortgage lender who hunts you down is over. It is now time for you, the consumer, to seek out the best lender for you with the best deal for your situation.
You’re not alone. The economy may be slow, but the industry is not. Mortgage lenders are swamped! They are inundated with work and faced with downsizing and lay-offs, they often struggle. Keep that in mind when you submit your application. Be patient and realize that it may take upwards of 30 days to hear back from a lender.
Feel free to contact me with any questions you may have, we, at Crestico Realty are here to help!
by CRESTICO | Jan 31, 2009 | CRESTICO
At Crestico Realty, we believe an informed client is a happy client, so we do our best to make sure you are informed, every step of the way! The first step we take in doing this, is to inform you before you become our client and give you a taste of our excellent customer service. Below, is information that many first time homebuyers seek from us every day.
You’ve decided to buy a home. It seems like the right and best thing to do, but why. Many first time home buyers ask us why it is better to own a home than to rent one. Renters face many challenges that homeowners do not. Primarily, if you get the right loan (which we can help you with), your mortgage should stay affordable every year and you will not be faced with one of renters’ biggest problems: rent increases. Next, why not let the place you live give you some tax benefits? Renters do not get to enjoy the same tax benefits that are associated with owning your home. If you have a family, or are thinking about having one; wouldn’t it be nice to have your kids born and raised in the same place? We all have fond memories of our childhood and our childhood homes. Kids love backyards and swimming pools and treehouses and slumber parties. These are things that may not be as accessible and as private as you would prefer them to be if you rent an apartment.
Also, when you rent, you are not making an investment, you are merely spending money. Money you spend on repairs, upgrades, decorations, renovations and rent loses its value once it leaves your checking account. But when you own a home, the money you spend on everything from landscaping to decorations becomes an investment, and you will see a return on that investment. You might say that everyone is talking about losing value and losing equity, but that’s only applicable to today’s market. If you look at the Real Estate market, over time, you will see that it is a cycle and any money you spend today will eventually regain its value tomorrow. And finally, above all owning a home means you OWN it and can do anything you like with it. You can decorate it and express yourself in a way you would not be as free to, if you were renting someone else’s property.
Next, first time home buyers find themselves faces with the question of location. We’ve all heard the saying “location, location, location!” That should give you a clue that location is very important. You will need to consider your lifestyle and your needs when determining a location for your home. Do you have children? Is the quality of the schools in the area an issue? Are you looking to join a community? Your Crestico agent can help you determine your needs and find the perfect location for you.
The next thing to consider is the money. The amount of money you will need to buy a home depends on many things including the cost of the home and the mortgage you get. Your Crestico agent will go over each and every step with you and introduce you to our preferred lender, American Guardian Home Loans and together they will explain the entire process to you. Generally, when you are purchasing a home, you will need to have cash on hand to pay a deposit when you submit your offer so that the seller will take your offer seriously. Also, you will need cash for the down payment and the closing costs (to cover the processing of the paperwork involved).
Most people purchasing a home do not do it entirely with cash. Most buyers needs loans. Choosing a first time home buyers loan can be a daunting task. It may seem overwhelming because there are so many different types of loans with different names and options associated with them. Not to worry, Crestico Realty has a dedicated representative at American Guardian Home Loans who is there only for our clients.
Finally, one more thing a first time home buyer should be aware of is insurance. Having the right homeowner’s insurance policy is an important part of being a homeowner. Homeowner’s insurance differs from renter's insurance in that it protects your home and its valuable contents from occurrences like theft, fire, floods and earthquakes (depending on your location and type of policy). There are other kinds of insurance, such as Private Mortgage Insurance (also known as PMI) which may be required, depending on your loan and mortgage terms. Your Crestico agent will work with you to get you the best value in insurance policies because Crestico Realty is your one stop shop for all your home buying needs. We are part of a network of professionals and have extensive relationships in the industry that we use every day to make sure you are getting the best the industry has to offer.
