fbpx
U

Mortgage Rates, Refinancing, and Everything Real Estate

July 6, 2012

With mortgage rates at record lows, a trending topic is refinancing and strategies for paying (or not paying) off your mortgage.  In today’s show, we highlight some of the pros and cons of the various options for homeowners.

The refi:   Refinancing your mortgage can be a great strategy for lowering your interest rate, lowering your monthly payment, and subsequently building equity in your home faster.  Some things to consider:  closing costs and other fees, how long you plan to be in the home, and what you will do with the extra cash.  Use this calculator to determine whether the savings you will realize from refinancing make sense in relation to the fees and the time you plan to remain in the home.  We also do not recommend refinancing if you are planning to retire soon or if you have already gone through the refinancing process recently.

Paying off your mortgage early:  Paying your mortgage off as quickly as possible is certainly an attractive option for those of us who are averse to debt of any form.  However, once you make those house payments, there is no guarantee that you can easily get that money back if you need it.  According to Forbes, there are even some lenders that charge a prepayment penalty to those overachieving borrowers.  Before piling all of your extra cash into your home, we recommend that you have a sufficient safety net of cash to get you through unforeseen circumstances (such as job loss, etc.).  Check Bankrate.com for the best current interest rates for your cash reserves.

Some final notes:

-If you have not thought about refinancing, now is the time to look into it.  Consider doing a 30 year rather than a 15 since rates are so low right now.  It may be nice to have that flexibility in the future.

-Look into the new HARP 2 program designed to help homeowners who have stayed current on their mortgages but are now underwater.  To qualify, your mortgage must must have been sold by June 1, 2009 to either Fannie Mae or Freddie Mac.  You must be current for the last 6 months with no more than one missed payment during the last 12 months.  Also, you have to own at least 80% of your home’s current value and this must be your first HARP refi.

-The FHA has a streamlined refinancing program that can lower your interest rate with minimal hassle – no verification of income or employment, no credit check or appraisal of your home.

Please share any of your experiences with refinancing below or on our Facebook page.  Have a great weekend, everyone!

 

FILED UNDER: Featured, Podcasts

Most Recent Episodes

Dave Ramsey vs. The Money Guy: Which Strategy is The Best?

Dave Ramsey has an incredible legacy of helping folks get out of debt and take control of their financial lives. We agree on a lot of things, but there are a few points of contrast. In this episode, we’ll discuss differences between The Money Guy Show and Dave Ramsey...

Top 4 Financial Mistakes We Saw This Year! (2022)

We saw some wild financial mistakes this year during the bear market. From making extreme changes to portfolio allocation, chasing the hot dot, and using too much leverage, we’ll talk about some of the biggest financial mistakes we saw in 2022 in this episode.   In...

How Millionaires Build Wealth! (With Dave Ramsey)

Join us for a very special episode as we welcome personal finance radio host and influencer Dave Ramsey to The Money Guy Show! There’s so much misinformation out there about building wealth. We had the pleasure of having a great conversation about how millionaires...

Do These 4 Things with Your Finances BEFORE 2023!

There are unique financial opportunities available at the end of the year - especially this year with the market down. In this episode, we’ll talk about what you need to do with your money BEFORE 2023! In this episode, you'll learn: What you need to do with your money...

How to Win When the Financial World is Burning!

Lately it’s felt like the financial world is in chaos, with rising interest rates, a falling stock market, and high inflation. Let’s talk about how to focus on what you can control and how to minimize the time spent worrying about what you can’t control. In this...

Financial Advisors React to RIDICULOUS Money Advice on TikTok!

The most powerful time to get serious about building wealth is when you’re young. So, what is the younger generation learning? Financial Advice (good and bad) is being produced in massive rates across online platforms and TikTok is the new frontier. Is there good...

Loss Harvesting: Why Wealthy People Love It (And You Should Too!)

Tax-loss harvesting: what is it and should you be doing it? In this episode, we’ll cover everything you need to know about tax-loss harvesting, including whether it makes sense for you, how much it could save you in taxes, and how to eliminate the downside of loss...

The Market is Crashing! (Where Should You Put Your Money?)

The stock market has not had a great year so far. You might be asking yourself, “Since the market is crashing, where should I put my money now?” In this episode, we’ll discuss how to invest when the market is dropping and how to make the most of your money. In this...

Will Rising Interest Rates Tank the Economy?!

The Federal Reserve is raising interest rates to combat inflation, and many are concerned about how it will affect the economy. In this episode, we’ll discuss what rising interest rates means for your wallet and how to make the best of it. In this episode, you'll...

How to Be Wealthy By Age! (Can You Catch Up?)

How much does it take for you to meet your retirement goals by age, and what are some common traps your peers fall into? Learn more about how to be wealthy, mistakes to avoid, and exactly what a little extra saving can do for your retirement income. In this episode,...