Four Signs You Should Refinance Your Mortgage

With mortgage rates still hovering around all-time lows, it might be a good time to consider refinancing your mortgage to snag a lower rate. Refinancing can reduce your monthly payment and total interest costs. Even if your home loan is as recent as last year, it still may be worth replacing. Here are 4 signs it’s time to refinance!

Your current rate is over 4%

Freddie Mac’s weekly survey revealed that last month’s average rate for a 30-year mortgage was holding at 3.29%. Last year, the typical rate was falling around 4.1% for the same 30-year mortgage. A study recently done by LendingTree has discovered that borrowers that refinanced a home loan taken out in early 2019 can save $60 a month for every $100,000 borrowed. Over the life of the loan that added up to almost $20,000 in interest savings!

Your credit is in good shape

It is no secret that the better your credit score, the better chance you have on landing a low interest rate. Credit scores can range anywhere between 300 to 850 with 800 and higher considered “exceptional” and 740-799 considered “very good.” If your credit score falls in the exceptional or very good range, you are in a better position to refinance and get a lower rate.

However, if your credit score could use some improvement, here are some quick tips:

  • Pay off credit card debt and lower your credit utilization (this is the percentage of available credit you’re using).
  • Don’t close old credit cards you’re not using. As long as you’re not being charged annual fees, this can help lower your credit utilization which will in turn raise your credit score!
  • Check for errors on your credit reports. If any errors are found, alert the credit bureau so that the issue can be resolved and removed from your reports.

Cash out your equity

A cash out refinance may be right for you if you are ready to cash out on built up equity on the home. Homeowners choose to cash out in order to pay for education, additional home improvements, eliminate other debt, or start a new business. However, if you choose a cash-out refinance it is important that you can keep up with the payments in the event the home improvements do not add value, or the new business fails.

You plan to stay in your home for a long time

Due to closing costs, it can take months or in some cases years to break even and begin the actual savings. If you are moving or selling soon, refinancing may not be a great idea. But if you plan to stay in your home, a refinance can truly save you money in the long run.

Get in touch with a Loan Officer today to find out if refinancing is right for you!

 

 

Source: https://finance.yahoo.com/news/5-signs-refinance-mortgage-now-182906584.html

DTI Ratio: What it Means for Your Mortgage, and 5 Ways to Improve it!

What Does DTI Ratio Mean for your Mortgage?

The debt to income ratio is a calculation of the percentage of your monthly debt payments, compared with your gross (pretax) monthly income. Monthly debt payments include mortgage payments, car payments, and any other minimum loan or card payments. Living expenses like gas, groceries, and utilities are not included.

The debt to income ratio is an important factor in qualifying for mortgages and other loans. The ideal DTI ratio for a mortgage is 36% or below. If your DTI ratio is too high, you may not qualify for the home loan you want. The lower the ratio – the better!

5 Ways to Lower Your DTI Ratio

  1. Pay off Debts Ahead of Time. Paying off debt means you’re no longer paying a monthly bill on it. Paying off smaller debts first, or debts with a high payment compared to their balance is recommended to get the best results.

 

  1. Refinance larger loans over a longer period of time. This would apply to large loans such as student loans. You can extend the length of the loan to reduce your minimum monthly payments, which will also reduce your DTI ratio. Just keep in mind that repaying a loan over a longer period can result in more interest paid over the life of the loan.

 

  1. Transfer credit card debt to a lower-interest card. There is often credit card offers available with an introductory period of lower or no interest. You can transfer the existing debt to a low or no-interest card in order to reduce your minimum monthly payment and the total amount paid overtime! At the end of the promotional period, you can always transfer again to a lower interest card!

 

  1. Look for ways to increase your monthly income. With the world of Etsy and YouTube channels, there are plenty of ways to earn extra income in addition to your monthly income. If you have a specific hobby or craft to share, it can gain you extra funds every month.

 

  1. Consider a 401k loan. You can take funds out of your 401k to pay off debt, and then repay the loan over time at zero interest. You will however need to pay taxes on the 401k loan amount. This can save a substantial amount on a high-interest loan. Just be sure to repay the 401k loan to yourself as soon as possible to keep your retirement savings on track!

Reducing your DTI improves your overall budget, can help your credit score and puts you in the right position to purchase a home you can comfortably afford. If you have any questions about your DTI in regard to purchasing or refinancing a home, please contact one of our experienced loan officers today!

8 Ways to Make Your Home a Smart Home

There’s no doubt that technology has revolutionized our everyday lives. Implementing smart devices and technology throughout your home can improve your quality of life. Other than work, we spend the vast majority of our time at home and by using technology to automate everyday processes, we can save time, energy, and even money. Here are 8 ways to transform your home into a smart home.

  1. Smart Home Assistant/ Smart Speaker

The first item you will need to turn your home into a smart home is a digital assistant. The two most popular options are the Amazon Echo and Google Home. Using voice commands, you can control many functions including the temperature, music, and even turning lights on and off. You can also use the assistant to set reminders or create your grocery list.

  1. Smart Home Hub

Some smart speakers have a built-in smart home hub, but if your speaker does not have one you should consider a separate hub. The hub is essentially the brain, a central location where all your devices connect, allowing for total automation of your home from one app.

  1. Smart Lightbulbs

Smart lightbulbs will not only make your life easier, but they are energy efficient! The bulbs will connect to your assistant giving you the power to turn lights on and off in any room with just the sound of your voice or on the app. Depending on the type of smart lightbulb you choose you can even control other settings such as changing colors!

  1. Smart Thermostat

A smart thermostat can be used to automate the temperature in your home. The thermostat can connect to your hub or assistant and can be controlled through the app. It can learn your favorite settings and monitor temperatures in different rooms of your home. Plus, if you are coming back from a trip, you can adjust the temperature so it is perfect once you arrive home!

  1. Smart Doorbell

Smart doorbells have become increasingly popular in recent years. They can create a way to keep your family and home safer. The smart doorbell will alert you when someone is present and allows for you to speak through the doorbell. The HD camera inserted into the doorbell adds the extra protection of checking in at any time. This could come in handy for when you’re not home. Most intruders ring the doorbell before breaking into a home, so if you’re not there and someone rings, you’re able to speak to them and see them which could potentially deter any further crime. Some smart doorbells even have the capacity to recognize frequent visitors and can tell you who is specifically at your door.

  1. Smart Plugs

Smart plugs allow you to group and schedule devices via your app. You can use these to put timers on lighting, turn on appliances, and more! These are cheap, easy to install, and connect to your smart home hub or speaker.

  1. Security Cameras

One of the best ways to keep an eye on your home is through indoor and outdoor security cameras. Most smart home security cameras, whether indoor or outdoor, can easily connect to your home’s wi-fi. Through your smart phone, you can access the cameras to check in and ensure everything is as it should be. Most people opt to have multiple cameras outdoors. Putting one camera on each corner of your home can allow a full range of view to see what is happening all around the perimeter. Many security cameras come with a storage option, some recording movements and allowing you to save or rewind to view previous footage.

  1. Smart Smoke and carbon monoxide detectors

Smart smoke and carbon monoxide detectors are essential in turning your home into a smart home. These smart detectors use technology to sense danger and alert you via your smartphone. Some detectors can even detect false alarms, only alerting you of a real threat. Most come with add-ons like sensors to determine occupancy in the home during an emergency.

 

Source: https://thesmarthomer.com/how-to-make-your-home-a-smart-home/

No Contact House Hunting

Amid rising Covid-19 cases and in consideration of the health and safety of agents and clients, Bright MLS has temporary loosened its restrictions on home listings which previously required properties be shown in person in order to stay on the market. If you are a future homebuyer or have been perusing listings you may have noticed a rising increase on homes with virtual options, such as virtual walk throughs and virtual open houses. With the current situation of the world today, real estate agents are forced to get creative when it comes to keeping business up. Some have even decided to live-stream tours of homes, allowing prospective buyers to sit back and watch while asking questions in real time. Some agents are still offering in-persons showings as well. However, extra precautions are in place such as sanitizing in between clients and limiting the amount of people in a home at one time.

Other aspects of the home-buying process have updated procedures as well to incorporate social distancing and respect the recommended self-quarantining. Home inspections and settlements are two areas in which precautions are being put in place. Recently, inspectors are advised to be the only one at the property while inspecting. Filming and taking photos of their inspection are ways they are ensuring clients are receiving the information they need and still being very much a part of the process. Now when it comes time to sign the paperwork and close on your new home you may find the room a bit emptier than expected. Realtors are now being asked to not be present during the settlement process and those that need to sign paperwork or present documents are being brought in separately to do so.

No doubt the current situation we are facing as a globe is drastically changing our everyday lives. But when it comes to buying a home, having a dedicated Realtor and Loan Officer in your court can make what seems like an impossible task at a time like this, very realistic. Due to technology and social media, you don’t have to put off your dreams of purchasing a home any longer!

Contact one of our Loan Officers today!

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