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Mortgage Rates are climbing. Last chance to lock in a lower rate.

October 8th, 2018 12:42 PM by Sam Kader

As rates continue to rise, this could be your last chance for many years to lock in a lower rate. As rates and mortgage amounts go up, the impact on your bottom line increases. Over time, this difference in rates can cost you thousands of dollars. 

Are you a good candidate for refinancing? When you refinance your mortgage, you pay off the remaining balance on your current loan and get a new one. You can get a new rate and new terms. You can get a cash-out refinance where you tap into the equity to extract cash and then get a new mortgage. You can even pay money in and take out a smaller mortgage. Those with adjustable-rate mortgages may be good candidates for refinancing. As mortgage rates climb, so will your monthly payments. If you lock in a fixed-rate mortgage now, you may be able to save thousands of dollars later. The same is true for people with high-rate mortgages who have since improved their credit. Today, most people aren't getting ARMs because the rates are about the same as fixed-rate mortgages. If you have an ARM, now is a good time to refinance into a fixed before rates get even higher. 

Cash-out refinance options. If you have outstanding higher-rate consumer debt and an above-market mortgage interest rate, a cash-out refinance might  be be a good option. That way you can consolidate all the debt into one presumably more affordable monthly payment. With a cash-out refi, you can use that money to pay off credit card debt (which usually carry higher interest rate) and get a new mortgage with better rates. 

What does refinancing cost? Refinancing fees vary by lender and state. Calculate when you'll break even on the new mortgage by taking into account the costs of refinancing and any prepayment penalty for paying off your mortgage early. On average, borrowers can expect to pay between 3 and 6 percent of their balance in refinancing fees. 
  • Application fee: We only charge a $28 credit report fee. 
  • Loan-origination fee: Our origination fee is 0 percent. 
  • Discount Points: It depends on if you want to lower your rate and pay loan-discount points. This is a discretionary expense. 
  • Appraisal fee: It varies from $525 for Conventional appraisal to $725 for FHA appraisal. Please inquire about our special appraisal credit program
  • Title and Escrow fee. 
  • Property insurance. Not really a fee since you have to incur this cost with or without refinancing.  
All of the above costs can be rolled into the new loan amount or you can ask the lender to pay them in exchange for a slightly higher interest rate (known as no-cost refinancing). 





Posted by Sam Kader on October 8th, 2018 12:42 PM

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