Refinancing Can Save You Thousands

Refinancing Can Save You Thousands

By Floyd Miller

 

 

 

Refinancing has become very attractive to homeowners who made purchases when interest rates were higher and their personal credit scores were lower. Not only do homeowners gain an advantage by refinancing at a lower interest rate, they also benefit from higher credit scores. Lenders reward people who have a history of making their payments on time by offering even lower rates than other homebuyers are receiving. The combination of lower interest rate with a rising credit score makes refinancing very attractive for responsible homeowners. {{more}}The three main reasons homeowners refinance are to lock-in a lower interest rate, to reduce monthly payments and to get paid for doing it. How does a homeowner get paid? By taking advantage of a Texas Cash Out. Homeowners who owe less than 80% of the value of their home can receive a check for the difference.For example, John and Mary have a home worth $200,000 and owe the bank $140,000. They can get a check for up to $20,000 and roll it back into their loan, in which case they would now owe $160,000, which is 80% of the value of the home.What is even more exciting is what happens to their house payment. The principal and interest payment John and Mary have been paying is $1140.88, based on the 6.5% interest rate they received when they purchased their home. After refinancing at a rate of 4.375%, their new principal and interest payment is only $901.21. Not only do John and Mary have a check for $20,000 in their hands, they have reduced their house payment by over $240 and can use that money to pay off credit cards and other loans that have a much higher interest rate. For many homeowners that aren’t planning to move within the next three years, refinancing with their current lender or a new lender is simply good business.Lenders offer various loan programs that can change from day to day based on your credit score, debt to income ratio, whether you want to pull some cash out of your equity and several other factors. Home refinancing can be like a game of musical chairs and it can be difficult for homeowners to keep up on their own. So many homeowners simply go to their local bank when the want to refinance, but local banks sometimes charge much higher interest rates, loan origination fees, etc. They are not as strictly regulated as independent mortgage brokers are. That is why more and more homeowners are turning to independent mortgage brokers like Boulevard Mortgage Group. Boulevard Mortgage Group helps you navigate through the sea of lenders and banks by shopping them for you on a daily basis, looking for a lender that is the best fit for your particular needs. Maybe you want a low interest rate but want to roll some home improvements into your loan. If you are a senior, maybe a reverse mortgage is your best bet. Professional mortgage brokers can help point you in the right direction.Mortgage brokers are very helpful in that they act as your anchor and lock-in a low interest rate for you as you go through the loan process. If rates go up, the mortgage broker has your back by protecting you from rising interest rates. Do yourself a favor a call a local mortgage broker, like Boulevard Mortgage Group. See how they can reduce your interest rate, lower your house payment and get a check in your hand. Lance Voorhees is a Yahoo! News contributor and Residential Mortgage Loan Officer with Boulevard Mortgage Group, NMLS #984762 You can reach him at 480-1438 or LVoorhees@theBMGLLC.com