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Refinance Now or Wait?
Refinance now or wait? Refinance now or wait? This is a timely refinance blog post from our premier lender, Dan Tharp, who has served our buyer clients for 10+ yrs. — JaCi Wallace
With rates coming down as they have, some borrowers may want to delay a refinance, hoping that rates will improve further. Unfortunately, there are no guarantees rates will go even lower, and more critical, borrowers forget about the savings they forgo while they are waiting for rates to move lower potentially.
To make sure I don’t get in trouble with my company marketing policy, I will not talk about specific rates and instead will talk about the difference between your current rate and a new rate.
Say your current mortgage payment is $1,775 a month. And based on a new rate, you could lower your monthly payment by $350 a month. You are in no rush and think rates will stay where they are or possibly go lower! Let’s assume by waiting another six months, you can score a .25% lower rate than today. The incremental savings you would see from a slightly lower interest rate would take a significant period to recoup the savings you would have been guaranteed by locking in that new rate today.
If you waited six months and could get a 0.25% rate lower than the rate you could get today, you would save $58 a month. But based on the $2,130 in savings you would have guaranteed by refinancing today, it would take over 3.5 years to make up for the forgone savings. If the rate were only better by 0.125%, it would take more than seven years to breakeven. And again, remember there is no guarantee that rates will move lower.
SECRET WEAPON – You Pick The New Term!
Get a tailored mortgage if your lender offers it! If you are managing your monthly payment just fine and have a goal of paying off your mortgage earlier by aggressively paying down your principal balance, this may be your secret weapon. For example, I have a client who purchased their home four years ago and wants to take advantage of a lower rate but does not want to start over with a new 30-year term, which eats into their long term savings.
We did the math and were able to lock them into a new 22-year mortgage while keeping their monthly mortgage payment roughly right where it is now. In essence, our client was able to shave-off four years of payments without increasing their monthly cash flow. Be creative and take the time to run these numbers with your lender. Refinance now or wait? Contact Weintraub & Wallace Realtors with RE/MAX Gold Real Estate. We can be reached at 916-233-6759.
— Dan Tharp
One Of The Leading Causes Of Divorce Can Be Financial
One of the leading causes of divorce can be financial — is an interesting blog topic from our preferred mortgage lender, Dan Tharp at Guild Mortgage. — JaCi Wallace
One of the leading causes of divorce can be financial. When a couples’ financial situation fails to measure up to expectations, and money stress gets so bad, they shut down. The communication between them often stops completely.
I have helped many couples obtain a mortgage to buy a home. They were laughing and smiling about the garden they were going to plant, or the BBQ they were going to invite me to. Only then to see one partner lose a job, then bills pile up. Next is the anger and the uncertainty starts to build. The next thing they know they are sitting down to talk about separating. It’s just plain awful.
As a mortgage planner, I educate my clients on “how to” buy a home and all the good stuff that comes with it. We also talk about the “Marriage Killer ” that could be lying in wait after the ink has dried on their mortgage documents.
I have seen first hand the pain and pure anguish from a once happily married couple, now facing this fight over money and their marriage. I used to avoid this topic in my early days to keep the mortgage experience light and positive. Now, my tune has definitely changed. I raise this uncomfortable topic as often and early in the process as possible.
Excellent clip from Jillian, a member of Inspirus Credit Union, speaking directly to this issue. She talks about a few simple tricks to help you zap the Marriage Killer. At a minimum, sit down with your partner and watch this video together. I am sure it will elicit some discussion about your current finances and future goals for retirement. Trust me, times are tough now for many folks, and the last person you want out of the loop – is your partner.
Please call Weintraub & Wallace with RE/MAX Gold if you are in need of a Realtor. We are also experienced working with divorcing couples and the attorneys when selling a home. We can help and be reached at 916-233-6759.
–Dan Tharp
