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
Mcwhorter 0005

The Coastal Corridor is Helping Wilmington Startups With Connected Devices for Life Sciences Industry

Heather McWhorter - UNCW Center for Innovation and Entrepreneurship
Tommytaylor ceo unitedway

How Philanthropy Fits Into Your Financial Plan

Tommy Taylor - United Way
2022052 75 142344351

Bridging Futures: The Case for Toll Funding in Wilmington’s Cape Fear Memorial Bridge Revamp

Natalie English - Wilmington Chamber of Commerce

Trending News

'Slippery Slope': Carolina Beach Leaders Deny Request To Rezone Former Hotel Site

Emma Dill - Apr 10, 2024

EPA Announces Standards For PFAS Regulation

Audrey Elsberry - Apr 10, 2024

New Hanover To Weigh $3.3 Million In Incentives For Industrial Park Expansion

Emma Dill - Apr 11, 2024

National Design-build Firm ARCO Grows Into Wilmington With New Office

Emma Dill - Apr 11, 2024

In The Current Issue

EMS Program At CFCC Receives Accreditation

CFCC recently announced its emergency medical services program has achieved accreditation from the Commission on Accreditation of Allied Hea...


TD Bank Brings Trend To Leland

In early March, New Jersey-based TD Bank opened its third Wilmington-area branch in Leland. That’s part of a trend for the bank....


Harjo Leads Indigent Defense

Since Jennifer Harjo opened New Hanover County’s Public Defender’s Office in 2008, she has strived to ensure her clients receive their Const...

Book On Business

The 2024 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2024 Power Breakfast: The Next Season