HOME REFINANCING

Considering Refinancing Your Home Loan?

Millions of Americans have taken advantage of the lowest interest rates available in decades. If you have been waiting for lower rates to refinance, it may be time to start your action plan. Everyone is familiar with the traditional refinance reasons, i.e. to lower the rate or shorten the term on a first lien. Here are some ideas you may want to consider that do not involve the traditional refinance approach:

Combining First and Second liens.

Refinance the underlying first lien together with any second lien financing that may have been put into place for property improvements. If you improved your home in recent years and obtained a second lien mortgage, you may decide that combining your first lien with your second would lower your overall payments. Typically, second liens are originated for 15-year terms. As a second lien it would generally carry a higher market interest rate. Refinancing both loans makes good sense if you can drop the rate on the first lien at least 2% and extend term as well as drop the rate on the second lien 3%. Armando can assist you with good faith estimates and payment estimate sheets to take all of the surprises out of your refinance loan.

Let’s go swimming!

 You may decide you want to refinance the first lien and make those much-needed improvements and renovate your home. This would include adding a pool, a cabana, master suite or other significant remodeling of your home.

Home Equity

loans have become extremely popular since their advent in Texas. The fact that lenders lend on an unrestricted use of funds basis means that the borrower can essentially use the funds for whatever they decide. These loans have allowed many Texans the opportunity to access dormant capital and put it to work in home improvements, college tuition funding, personal investments, and starting new and supporting old businesses. The disadvantage to a Home Equity loan is “once a home equity, always a home equity”. This statement implies that home equity loans must remain home equity loans until they are paid off. There are inherent program risks to the lender associated with Home Equity loans. This causes lenders to require a higher yield (greater interest rate) for this category of loans. The other issue that holds many borrowers back is that Home Equity loans are limited to only 80% of the value of your property. Armando can explain methods of avoiding these higher rates and restrictive loan to value ratios by using alternative methods of accomplishing the same cash flow strategies.

VA/FHA refinances

refinances are the easiest of all refinance transactions to accomplish. There is no re-qualifying and the paperwork is minimal. A major consideration may be whether to maintain the existing VA/FHA loan or pay it off with a new conventional mortgage. There may be a significant savings associated with the new loan to value. Armando can lead you through these choices.

Liens and Judgments.

We all know that bad things some times happen to good people. As such this may be an opportunity for you to refinance your current mortgage and add in negotiated “offers in compromise”. An example of this would be IRS and unpaid property tax liens and judgments. These types of transactions can utilize loan to value guidelines as high as 95% of the value of your property. Regardless of your past credit discrepancies, Armando will have a program offering.

The following table will give you an idea where you may currently be on your mortgage and
where you could potentially see your mortgage payments after the refinance.

One of the columns the rate for a loan originally financed in 2/2000. The Fannie Mae rate at that time was approximately 7.875%.
You may wish to send us your email address and request the underlying Excel spreadsheet so that you may enter your true interest rate and receive the comparison chart as it relates to your particular loan. If you would like, simply call ask for the Refinance Comparison and Savings Chart.

 Refinance Comparison and Savings Chart

Original
Loan Amount

30-Year P&I Fixed Rate

New P&I 30-Year Fixed

Estimated Monthly Savings

 

7.875%

4.6%

 

$50,000$363$256$106
$100,000$725$513$212
$150,000$1,088$769$319
$200,000$1,450$1,025$425
$250,000$1,813$1,282$531
$300,000$2,175$1,538$637
$350,000$2,538$1,794$743
$400,000$2,900$2,051$850
$450,000$3,263$2,307$956
$500,000$3,625$2,563$1,062
$550,000$3,988$2,820$1,168
$600,000$4,350$3,076$1,275
$650,000$4,713$3,332$1,381
$700,000$5,075$3,589$1,487
$750,000$5,438$3,845$1,593
$800,000$5,801$4,101$1,699
$850,000$6,163$4,357$1,806
$900,000$6,526$4,614$1,912
$950,000$6,888$4,870$2,018
$1,000,000$7,251$5,126$2,124

All rates are for calculating purposes only are subject to change at any time without notice.