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When you need a quick and easy refinance of your home or investment property, try PrimeLending, A PlainsCapital Company. Our customers have said that our speed of processing, knowledgeable staff and aggressive programs set us apart from our competition.To get started immediately click here for our on-line application.
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| There are many things to consider when refinancing your home loan. The fees associated with refinancing can add up quickly, so many mortgage companies will waive fees associated with refinancing applications and legal fees in exchange for a higher interest rate. It is important to talk about your loan options with Mr. Drescher. Additionally, the amount of time you plan to spend in your home will impact your decision to refinance. It is conventional wisdom that one should recoup the cost of the refinance in three years, but if you are certain you will be in the house and the mortgage for longer than five years, it could make sense to refinance even if the savings is not recouped until longer than three years.
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Saving money is important in today's economy and refinancing your home loan may be one way you can lower your monthly payments. A careful analysis will ensure that you make the right decision. The costs associated with refinancing are similar to those of obtaining an original home loan, with the added cost of having to pay for the title insurance if the seller paid for it when you purchased the home. When refinancing, additional fees will arise that can include a fee charged if you pay off your original mortgage early. In the days of lower home loan amounts and higher interest rates, it was considered wise to refinance if you could lower the rate by 2%, but not anymore. Therefore, even if your rate change is less than 1%, you may be able to save enough to make it profitable to refinance. Contact Mr. Drescher to discuss the various costs potential savings you can enjoy.
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The decision on whether or not to refinance has, in the past, meant balancing the savings of a lower monthly payment against the costs of refinancing. In recent years, mortgage lenders have introduced "no cost" and low-cost refinancing packages that minimize or completely eliminate the out-of-pocket expenses of refinancing. With traditional refinancing, the interest rate for the new mortgage was often expected to be about 2% below the rate of the current mortgage. However, with the newer low and no-cost refinancing programs offered, home owners can find it valuable to refinance to obtain a smaller reduction in interest rates.
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Many mortgage lenders will offer a refinance package in which you can refinance for more than the balance remaining on your old home loan. In the mortgage world this is called “cashing out”. It's even possible to do so without increasing your monthly payments if you lower the rate enough or lengthen the term. The extra cash that results from refinancing can be used for many purposes; one of the smartest ways to use these funds is to pay off any loans with higher interest rates or that incur non-tax-deductible interest. If you are in a positive position regarding debt, you may be interested in using the money for a more enjoyable purpose, such as building an addition on to your home, buying a boat, or even paying for your children's college expenses. However you decide to spend the money, Mr. Drescher will help you through the process.
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When home owners make the decision to refinance their home loan they must decide which interest rate will work best for their situation. There is typically a range of interest rates at different amounts of points and fees. Remember, a point is equal to one percent of the loan amount. When you discuss things with Mr. Drescher, he will be able to analyze the different interest rates and related points, leading to the best way to save you money. Some combinations of interest rates and points may cause your monthly payment to increase, though, such as when you shorten the term from 30 years to 15. Be sure to discuss all of the options with Mr. Drescher before making a decision.
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The costs associated with refinancing are similar to those of obtaining an original home loan and include legal fees, appraisal fees, title insurance fees, and other related fees. There is no magic formula for determining the costs, because some of the costs are fixed and not dependent on the loan amount (like the escrow closing fee or the cost of an appraisal), while others are variable and depend on the amount of the loan (like points or title insurance). Also, when refinancing, it's vital that you investigate whether the pay-off of your existing loan will include a fee charged if you pay off your original mortgage early, called a Pre-payment Penalty. If there is a Pre-payment Penalty, it could last as long as five years from the start of the existing mortgage, so make sure you check your note for the details.
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Refinancing makes sense for many of our clients because refinancing can result in valuable savings. Now could be a good time to refinance for a second time. The timing is important because when interest rates are falling quickly you can reduce your monthly payments even further. Mr. Drescher will also help you understand the tax write off associated with a second refinance. The money that Americans are saving can be used to build emergency cash funds, build additions onto their homes, or they can save it for a child’s college fund.
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Home owners have two rate options when refinancing their home loans, fixed rate mortgages and adjustable rate mortgages, often referred to as ARMs. ARMs are attractive in today’s economy because they can offer low introductory rates, lasting as long as ten years in some cases. The longer the start rate term, however, the closer the rate will be to a standard fixed rate. If you have strong sense of how long you will keep the house or the mortgage, it might be wise to choose an ARM even in a fixed-rate environment. And in a higher-rate market, you can ride an ARM down as rates go lower, until you feel rates are at the bottom and it's worth refinancing to a fixed rate mortgage then instead.
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Many home owners find the tax issues related to refinancing to be confusing, but it's really not that bad. To explain briefly, the Internal Revenue Service (IRS) has ruled that interest paid for refinancing must be deducted over the life of the loan - - including the point(s) paid at closing. However, if the home loan is being used to make improvements to your house, you may be permitted to deduct that portion of the points right away. The exact tax laws concerning refinancing are complex and the details should be discussed with your accountant. The IRS website, www.irs.gov, may also be helpful when gathering general information on the subject of taxes and refinancing.
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Refinancing your home loan is a great way to gain extra cash. refinances are popular among home owners and our mortgage brokers are experienced with refinances. Contact us today to learn more about your refinance.
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