Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
Spring is finally in the air. According to many forecasts, this spring’s real estate market should be the best we have seen in more than a decade. The economy is progressing, and results from a recent Mortgage Bankers Association survey show that loan applications are on the rise. The combinations of low mortgage rates coupled with improved home prices are leading to a lot of refinance opportunities for motivated applicants.
I have previously discussed the different types of available refinance programs, and many of the valuable benefits that updated home financing can have on the overall monetary position of an individual. Specific to this topic however, we are discussing refinancing strictly because rates are lower, and a person is trying to determine if it makes sense to pursue altogether. We have broken down the most important factors into four categories.
Is The Monthly Payment Going Down?
A simple online calculator can determine if you will be saving on your mortgage payment on a month over month basis. By calculating the new proposed Interest Rate along with the new proposed Loan Amount, you can easily see what your savings would be by refinancing. For those that have paid down their mortgage significantly, the monthly payment continues to be based on the initial mortgage amount that you took out years ago. Resetting the loan balance through a refinance, might in of itself lead to significantly lower payments.
Is The Life of Loan Interest Getting Reduced?
Often, there might be a savings that can be achieved on a monthly basis, but by pushing the new loan out for more years, the total interest payments over the life of the loan will go up. This is a very common scenario, and should give pause to many people as they make the ultimate determination whether a refinance is feasible. That said, there are a few approaches that I have personally implemented that take into account the new interest payments and still make it worthwhile. I can’t give out all of my secrets to the general public, so please call me privately for more details.
When Will You Recoup The Closing Costs?
Most mortgage loans have closings costs that will be incurred when you refinance. Sometimes these costs are paid by the borrower, sometimes they are financed in the new loan, and sometimes they are absorbed by the bank. Approved Funding offers all three options but the consideration is different for each individual circumstance. If you want to know how to best “shop” these closing-cost vs non-closing cost programs, please contact me directly for the insider tips on what to ask for.
Where Can You Get The Best Offer?
Many people wrongly believe that going to their existing bank who is servicing their loan will yield the best and cheapest mortgage. That couldn’t be farther from reality in this day and age. At the end of the day, over 90% of the mortgages originated today are being underwritten and sold to a governmental agency and thereby go through the same set of standards and requirements. The distinction between one lender and the next, between one broker and the other, is how good their rates are, and how easily they can get you the mortgage you need.
As a Direct Lender with three decades of relationships with our investors, banks and secondary market sources we have secured wholesale rates and fees which we proudly pass on to our clients to ensure they get the best rates and terms in the marketplace. Call today while the rates are too good to PASSOVER. Wishing all our friends a Happy and Healthy Pesach!
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