Are you paying to much interest in your mortgage? Maybe its time to refinance. Mortgage payments to your bank are comprised of two parts: principal and interest. Principal is the portion of your original loan that you repay to the bank. Interest is the fee you pay for borrowing those funds. The amount of principal and interest you pay changes month-by-month. At the start of your mortgage, the principal portion is relatively small with your payment going mostly to interest. As years progress, more of your payment goes towards the principle of your loan and less toward interest. A homeowners schedule of payments is known as an amortization schedule. Its a model that favors the lender because interest payments are maximized during the loans early years. The bank is “banking” on few homeowners holding on to their homes/original mortgage for a full 30 years. However, with mortgage rates still at historic lows and home values on the rise, more homeowners are now eligible to refinance. And, the best news is you may not need home equity to do it. With just modest credit scores and a verifiable income, homeowners can be mortgage-eligible via any one of five government agencies: Fannie Mae, Freddie Mac, the FHA, the VA and the USDA. Each has a refinance program for homeowners with, or without, home equity. For homeowners whose homes have lost value since purchase, there are also refinancing options: - Fannie Mae or Freddie Mac loans may qualify for HARP program - FHA loans may qualify for the FHA Streamline Refinance loan - VA loans have the IRRRL program for refinancing: The IRRRL program for veterans - The USDA has the USDA Streamline refinance program. For everyone else, standard refinance programs give access to great, low rates, too. Youll want to avoid high closing costs, if possible. Paying too much to refinance can reduce the benefits of refinancing. Therefore, talk to us about low and no closing cost mortgage options. Rates for such loans will be marginally higher than Freddie Macs published rate of 4.34% but the money saved in the long-run may be worth it. Home buyers and refinancing households have caught an unexpected break. Mortgage rates, which were expected to rise sharply this spring, have remained close to stable. Call to set up a time to discuss your options and opportunities. 971-273-7693 HomeSweetRates
Posted on: Tue, 29 Jul 2014 23:03:55 +0000
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