HARP Or Not, Should I Refinance?
July 19, 2012No CommentsHARP 2.0 Refinance Program, Mortgage Financing, Mortgage Refinance, Videos Fannie Mae, Freddie Mac, HARP 2.0 Refinance Program, Michigan, Michigan Home Loans, Mortgage, Mortgage Insurance, Mortgage Rates, Refinance
Interest rates have touched all times lows again. If you plan on staying in your current home for at least 4-5 years, you may fall into one these categories below:
1 – You are NOT HARP eligible.
You may be one of the people that do not have a Fannie Mae or Freddie Mac backed mortgage or you may have already used your ONE time access to HARP.
Values have started to turn toward the positive and you may have options under the traditional refinance parameters. Although most people are adverse to paying PMI, in many situations paying PMI on a shorter term loan can still save thousands of dollars and PMI may only be a factor for a couple years.
Moral of the story here is if you currently have a mortgage rate in the 4.5% range or higher, you should take the time to review the options.
2 – You have a 2nd mortgage or Equity Loan.
There really is NO way to wrap the two loans together without a ton of equity, so we have two schools of thought here.
- One is to stretch the term of the 1st mortgage back to 30 years to free up cash flow to pay much more aggressively toward the 2nd mortgage to make it go away as fast as possible.
- If you believe this will not work for your household and the money may go other places then simply commit to a shorter term mortgage to gain equity much faster and look to refinance the two loans together at a later point in time.
3 – You truly enjoy actively managing your finances including the mortgage.
Intermediate ARM rates are below 3% for 5 yr and 7 yr terms. The benefits here are the incredibly low rate and the payment flexibility. If you pay aggressively the balance outstanding upon the rate adjustment will be modest.
You can also have the option to make the minimum payment for a period of time if that money is better served put into savings of some sort. Again ARMs are only for those that are actively managing their finances.
Finally, we made the big move last week! We moved about 200 yards east into the Green Glass building, Suite 108. Come by and say “Hi”!