Our LicensesLicensed Massachusetts Mortgage Broker- MBA Mortgage Corporation Athol Branch identification #401084- License #MB2880-100.
Licensed by the Massachusetts Division of Banks. License #MB2880
Licensed by the New Hampshire Banking Department. License #11440-MBR
Licensed by the Rhode Island Division of Banking. License #20072210LB
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Category Archives: Uncategorized
4 Predictions for Real Estate in 2019 What will 2019 bring? What will rates do? Will home values go up or down? I anticipate a lot of the current trends to carry over into 2019. Here are the top … Read More
We are headed into the colder part of the year, the kids are back in school, and the holidays will soon be upon us. If you watch the news they will tell you that housing inventory is back up and … Read More
Even though we are still enjoying a few nice Autumn days, we all know that the weather in New England can change in a flash. I feel like the hardest season to be a homeowner is winter. It’s a constant … Read More
I will start off with the most important thing for you to take away from this update. NOW is the time to get a house. Mortgage rates are at their highest point in 7 years and are continuing to go … Read More
Ok, so it’s not really a miracle. That just happens to be what the financial specialists like to call it. However, compound interest plays an important part of how you manage your mortgage, so this month we are going to … Read More
But the TV says it’s a good time to refinance….
When we have a mortgage interest rate dip it apparently makes for good news. Good Morning America had a segment on NOW being a great time to refinance because of how great the rates are and my wife asked me (for about the 100th time), “Why don’t we refinance?” After I explained the reasons why it doesn’t make sense for us I got the inspiration to tell everyone when the best time to refinance really is.
Here’s the answer. The market has no bearing on if it’s a great time to refinance.It is all relevant to your overall goals and financial strategy. Refinancing has so much more to do than with interest rates. Getting a lower interest rate could be what some people’s goal is but it is just one of the motivations.
You can look at refinancing for…
a lower rate,
for a fixed rate,
for a shorter term or a longer term,
for equity harvest for a number of reasons
for debt consolidation,
among other strategies.
The point is that each person has their own unique factors in their life that may have a different motivation and getting a lower rate isn’t necessarily the best idea.
Here’s an example.I had a client come to me that had gotten in over their head with some poor credit card decisions that affected their credit score. They had a 5% rate on their mortgage (which was low to the market at that time) and equity in their home. Their concern was that they didn’t want to give up their rate but at the same time were worried that their cash flow issues would wind them up in foreclosure. We came up with a two part plan to help them save their home and lower their stress.
First, we refinanced the house and used their equity (which was an unused asset) and consolidated their payments. Their new mortgage had an 8% interest rate because of their credit score but overall their payments were lower than what they had been putting out in total payments prior to the refinance. This also took their debt, in their circumstance their bad debt, and made it tax advantaged debt. The second part of the plan was credit repair so their goal over the next 12 months was to make sure that they recovered from their bad decisions.
Once we got to the point where their credit had been repaired about 14 months later, we refinanced them back into a 5% rate and lowered their payment again. This plan didn’t negate the debt they had accumulated but had positioned it so that they were able to apply more to principal to lower that debt more quickly and also to save their home.
When is it a good time to refinance? There is only one way to know. Get an evaluation. With minimal information I can look at your current loan and evaluate your situation to let you know what things are open to you. Right now is a GREAT time to take advantage of that. Rates are low but also very volatile and could move higher at any time and capturing that lower rate may be the key to opening up some options for you. The last quarter of 2014 saw a huge amount of new purchases that brought values up in many areas so if you need a little more equity to have a refinance make sense for you it might be there now.
Resolution to change or to embrace who you are? After seven seasons, this past fall Sons of Anarchy had its series finale. If you liked this show then you never missed an episode and the rest of you think I’m … Read More
Buying in the winter… Traditionally, fewer homes are sold during the winter months of December, January and February nationwide. Astute home buyers can take advantage of this drop-off, and potentially find a “better deal”. There are a … Read More
Can you afford to lose $175/month? Did you know that the monthly payment on a $200,000 30 year mortgage would go up by a whopping $175 per month if mortgage rates go up slightly from 3.5% to 5.0% like they … Read More