Most Americans largest debt payment on a month to month basis is their mortgage. While it’s a large portion of their debt very few people have their mortgage reviewed on an annual basis by a mortgage professional. Roughly 56% of the country has a mortgage currently and most utilize fixed rates for 30 and 15 year terms.
Since there are several reasons a homeowner may choose to refinance, let’s look at 5 of the best reasons.
1. Restructure your existing mortgage.
Some people aren’t very pleased with their existing mortgage or mortgage servicer. In 2017 mortgage servicer satisfaction fell slightly. Restructuring your mortgage through a new company can not only reset your terms but can also get you out of an unhappy relationship with your current lender or servicing company.
2. Your credit score has improved since your purchase.
According to credit.com the average credit score of American’s in 2016 was a 673. Prime credit for a mortgage is considered to be 740 or higher. A 50 to 100 point difference can mean a difference of thousands of dollars over the life of a mortgage. With buyers being more credit conscious and great tools like Credit Karma and monitoring services offered it’s not difficult to see where your scores can improve and make those changes. If your credit has drastically improved since you’ve obtained your mortgage you are the perfect candidate for a refinance.
3. Home improvements are on the horizon.
If you’ve owned your home for a year or two and have built up equity you have a great opportunity to utilize that equity to improve your home. With interest rates still very low in relation to the past, more homeowners are utilizing refinances as a means to fund their home improvements. Nerdwallet notes that while a HELOC or home equity line of credit can be okay for small improvements you can potentially save a large chunk of money by utilizing a cash out refinance.
4. Lower your interest rate.
Depending on when you initially bought your home your rate could substantially decrease through a refinance saving you thousands over the life of your mortgage. With rates holding fairly steady right now at almost all time lows and an increase on the horizon due to the recent decision by the Fed now is an incredibly good time to refi and lock in a lower loan rate for the long haul. We often find a large amount of savings for buyers looking to refinance.
5. Remove your private mortgage insurance.
Unless you put 20% down on your existing home you likely have a PMI or private mortgage insurance amount included in your monthly mortgage payment. Normally to remove your PMI you need to have at least 20 percent equity in your home. Once a conventional loan is paid to 80% of the home’s value you may request that the PMI be removed. When the balance drops to 78 percent, the mortgage servicer is required to remove the PMI. FHA mortgages are not included in this scenario. Interest rates are set to rise again in 2018 so now is a great time to refinance and remove your PMI while locking in potential savings over the life of the loan.
Get in touch with us today to discuss your refinance and we’ll be happy to help! Call 813-302-1616 or contact us to get started.
Buying your first home can seem like a daunting task. It doesn’t have to be.
Spring is historically the busiest season for home purchases around the nation. In Florida, real estate purchases and mortgage applications especially increase while home buyers look to move or purchase before the summer heat hits. We already have some great info on our website regarding mortgage specific basics and a great guide on the home buying process. In this article though We’re going to focus on 5 simple steps you can take to improve your home buying process.
1. Get your finances in order with a well thought out budget
Throughout your mortgage qualification we’ll take into account not only what you can afford but what you actually want to spend. Many big box lenders will automatically max out your pre-qualification to get the most money out of you. It’s important to take a few moments and go through your finances to figure out what you want to pay monthly for your new home expense.
At The Orlicki Group we believe that staying within your budget is important to you enjoying your new home. We’ll talk with you about what you would like to spend and what your plans are for your down payment to get you a pre-qualification that meets your needs.
2. Gather all your paperwork
You know that big pile of taxes, bills, pay stubs, and paperwork you’ve been neglecting? Now is the time to get that in order. During the documentation of your mortgage we’re going to need a few things that you can prep to make your mortgage that much easier. Here’s a few things we’re going to ask for:
- Two Years of tax returns (all pages and schedules)
- Two years of W2 / 1099
- Clear color copies of your Driver’s License and Social Security Card
- 2 months of Bank records for all accounts
- Two most recent pay stubs
There may be more that we’ll need but that’s a great place to start. Scanning everything in and digitizing it is the best way to prepare your documents. Most of your bank records and pay stubs are available online for download. If you use Turbo Tax or another online tax filing system you can download all your pertinent documents after you log in to your account. Don’t forget that we will need ALL the pages of your docs. Yes even the blank ones. We’ll guide you through every step of the process though so don’t worry. It’s easier than it sounds.
3. Examine your credit report
During your mortgage process we’ll thoroughly review your credit report. It’s nice to know what’s coming down the pipe though. If you haven’t taken advantage within the past year now is a great time to review your annual credit report from Equifax, Experian and Trans Union. The FTC suggests that you review your credit report prior to any major purchase, like a mortgage. In a recent study the FTC noted that 1 in 5 Americans has errors on their credit report.
Another great reason to check your report annually is to safe guard yourself from identity theft. According to Credit.com
When you decide to pull your credit report the only site you should be pulling from is FreeCreditReport.com. This is the only site verified and authorized by the FTC.
“2016 will be remembered as a banner year for fraudsters, as numerous measures of identity fraud reached new heights.” Fraud losses totaled $16 billion, the report found. About 1 in every 16 U.S. adults were victims of ID theft last year (6.15%) — and the incidence rate jumped some 16% year over year.”
Taking simple steps such as reviewing your credit report annually can
4. Slim down your baggage
Never will it be more apparent than when you are getting ready to move that you have entirely too much stuff. There’s a few ways that you can look at slimming down your belongings when moving into your new home. One simple trick is to get a large storage bin and start putting things in it as you go. See things you don’t use or have been meaning to get rid of? In the bin they go. Once the bin is full, mark that for donation and start again. You can also start by organizing your existing home regularly. Put that messy closet in order. Slim down your wardrobe.
The idea is that you want to move as little as possible into your new home to make way for things that you might need and limit the size of the moving truck or number of trips you will need to make.
5. Work with a reputable mortgage professional
Last but certainly not least you’re going to want to get pre-approved with a reputable mortgage professional. The Orlicki Group is a team of professionals with a very personal touch. Oliver has almost 200 5 Star Zillow reviews.
We can get you pre-approved and guide you through the mortgage process with ease. Don’t suffer through a disconnect with a big bank or think that a space ship mortgage on your phone is the way to go.
We’re always here to answer your mortgage questions and assist you with your needs. Working with first time home buyers is one of our favorite aspects of the mortgage business. Call us today at 813-302-1616 or CONTACT US to get started.
Mortgage rates can seemingly do no wrong this week. They fell again today–this time making it firmly into territory not seen since late April. At current levels, many lenders have moved on to quoting conventional 30yr mortgage rates well below what I was able to give most of my past clients.
Today’s improvements, and indeed some of the improvements earlier this week have NOT been captured by Freddie Mac’s weekly Primary Mortgage Market Survey–the industry standard for mortgage rate tracking. While the survey is highly accurate over the long haul, its methodology doesn’t allow it to capture all of the movement in any given week. In fact, the only rate sheets that inform the survey response are those that come out on Friday afternoon through Wednesday morning. Moreover, the survey responses tend to arrive more toward the beginning of the week. That means if things are moving fairly quickly over the course of the week, Freddie’s survey will be a bit behind the curve.
There’s nothing good or bad about the lag in the Freddie Mac data. It’s a valuable resource that just happens to be a bit too ‘wide-angle’ for the average borrower or originator seeking the most up-to-date information on rates. I only bring it up because almost every major news outlet relies on the Freddie report for its official weekly article on mortgage rates. Today, those articles will be saying there hasn’t been much of an improvement over last week, and it’s important you know that’s no longer the case.
This is a timely piece of information as well, because tomorrow brings the important Employment Situationreport (aka “jobs report, nonfarm payrolls, or NFP”). This is the biggest piece of economic data that comes out each month and it has the greatest potential to cause movement in the bond markets that dictate mortgage rates. With rates at 5-month lows and even a 50% risk of a big bounce higher, it’s even harder to make a caseagainst locking today. Granted, risk-takers could be rewarded if the report is exceptionally weak, but even then, we have to consider that rates can sometimes bounce higher simply because they’ve gotten tired of moving consistently lower. We’re not quite to the point where that’s an imminent risk regardless of the data, but certainly, an equivocal jobs report wouldn’t make any strong arguments for rates to continue lower.
Mortgage rates moved moderately lower yet again. This extends a winning streak that began on July 14th, making it the longest positive trend in 2015. If this seems paradoxical in light of everything you may have heard about the Fed hiking rates this year, that’s normal. Market participants and pundits have a long history of getting too attached to a certain idea only to be punished by markets for the imbalance.
Mortgage rates moved lower today at their fastest pace since January 14th. Rates sheets moved well past recent lows and back to levels not seen since May 10th 2013. That was the day that the Wall Street Journal’s Hilsenrath suggested the Fed was mapping an exit from stimulus, which sent markets into the tailspin that was effectively the prologue to the taper tantrum. It’s amazing, or at least interesting to consider that asset purchases have now been fully phased and that a rate hike is a much more immediate threat, yet rates are back to where they were before markets really began adjusting for all that “stuff.” That’s the power of global economic turmoil and a troubling lack of inflation for core economies.
The specific result today is the greatly-increased prevalence of 3.5% as a conforming 30yr fixed quote for top tier scenarios. 3.625% is ubiquitously available, but again, keep in mind that these rates refer to top tier scenarios with 25% equity or more, and high credit scores among other things. The important part is the day-over-day change and the relationship to recent levels. In other words, no matter what you were quoted in the past few weeks, if your scenario is the same, today’s rates are better.
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