Follow Patrick Linkedin Facebook
Email Patrick Email
Financial
Jul 13, 2016

Strategies For Saving Money When Refinancing

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

With interest rates as low as they are, I have been getting lots of questions from home owners interested in refinancing their mortgages. This is certainly not surprising, considering the average interest rate for a 30-year fixed rate loan is around 3.27 percent, as of the date of this writing.
 
Of course, interest rates can vary significantly according to a borrower’s income or financial situation. Similar to many other aspects of business and major life decisions, there are many variables involved with a refinance. This is why it’s key to start the process from a position of knowledge instead of uncertainty.
 
With that in mind, here are some questions that my clients frequently have for me, along with some valuable tips for saving money when refinancing a home.

  • Don’t restart the clock. Doing a refinance to cash in on lower interest rates doesn’t necessarily mean that you have to get another 30-year loan. Many lenders these days have flexible guidelines that allow them to create a new loan and deed of trust for a differing number of years than the traditional 15-year and 30-year formats. If that is not an option, then a good course of action is to make an additional payment on the principal each month. This will shorten the payoff period and make a substantial difference over the long-term.
  • Avoid paying closing costs. Seeking the lowest interest rate possible can actually result in significantly higher costs. In many cases a borrower’s lower-interest-rate option is accompanied by a large number of points and fee amounts, while the borrower’s slightly higher-interest-rate option has no fees and can even include additional rebate funds. Understanding that it is not unheard of for a borrower to spend up to $7,000 buying a lower interest rate, it is easy to see why opting for a loan with a slightly higher rate is a great choice for most situations. It may seem counterintuitive to think that a lower rate and a lower payment can cost more over the long-term, but that is the reality of the situation when closing costs are a factor.
  • Choose a fixed rate. It’s not a good idea to get a loan product that includes a floating interest rate, with the hope that rates will fall in the future. There is no guarantee that rates will fall and if economic storm clouds suddenly began to form, the interest rates and costs could increase dramatically.
  • Shop around. Turning to friends, family and your social network for guidance regarding their favorite financial institutions or mortgage brokers is always worthwhile. It is important to note, however, that each inquiry from a creditor can reduce your credit score by two to five points. To increase the chance that several inquiries might only count as one, make sure to have your shopping and all of the inquiries performed in a 15-day time period.
  • Get a second and third opinion. Don’t give up if a lender tells you no. It is not uncommon for lenders to have different guidelines regarding eligibility. If it gets to the point where you have basically received the same answer from at least three sources, however, it may be time to ask for help to identify a solution to your credit issues.
For additional help or guidance about how to refinance your mortgage, please contact me at the number below.

Patrick Stoy (NMLS Numbers 39527 and 39166) has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.
 
 

Other Posts from Patrick Stoy

Mcm 14jan insight
Ico insights

INSIGHTS

SPONSORS' CONTENT
Fredheadshot 5119113348

How a Custom Garage Can Increase Real Estate Value

Fred Kumpel - Strickland's Home
Hardyheadshot

Start Your Doctor of Nursing Practice Degree to Get Ahead of the Curve

Charles Hardy - UNCW College of Health and Human Services
Alyce 4 april242017

Investors with A Cause Can Put their Money Where their Hearts Are

Alyce Phillips - Old North State Trust LLC

Trending News

Renting Continues To Get More Expensive In Wilmington, Data Shows

Cece Nunn - Jun 24, 2019

Medical Building In Wilmington Sells For More Than $5M

Cece Nunn - Jun 25, 2019

At Mayfaire, New Physical Therapy Facility Throws Out Insurance Model

Cece Nunn - Jun 24, 2019

Adam Sisk Promoted To Principal Engineer

Christina Haley O'Neal - Jun 25, 2019

With ILM Business Park Fully Leased, Land Still Open For Development

Christina Haley O'Neal - Jun 25, 2019

In The Current Issue

Software Firm Codes For Growth

After growing PS Solutions in Pennsylvania, founder Wayne Hippo came to Wilmington with the goal of replicating the company’s growth in the...


Aquarium Named Among Nation's Best

The N.C. Aquarium at Fort Fisher is among the top 10 aquariums in the country, according to a USA Today poll. Voters ranked the state’s aqua...


Chen Puts Final Touches On Ramen Shop

Johnny Chen, the food entrepreneur who brought sushi to downtown Wilmington more than 15 years ago with his first Nikki’s restaurant, has ag...

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Power Breakfast - The H Word (June 13, 2019)
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`
Health Care Heroes 2018