Financial Facts: Is it too late to refinance?
special to the daily
As home mortgage interest rates sit at a historic low, many homeowners are not refinancing. For some, refinancing may be a pipe dream, but for many a refinance may be just what the doctor ordered.
Some of my first questions to a potential borrower are: why do you want to refinance, and what are your goals in refinancing? Some just want to lock in longer terms on the mortgage, and others are looking to consolidate their current debt. And then there are others that need to refinance due to the amount of debt they have. They are barely able to make the current monthly payments and by refinancing, they can get their financial situation under control. These homeowners can use the equity in their home to get things on the right track.
Another thing that is playing on the minds of homeowners is that rising interest rates may be coming soon and the little time they may have left on their short term adjustable rate mortgage (ARM). Right now, by refinancing to a fixed rate mortgage the payment might be a bit higher, but if the refinance is not done quickly the interest rates that ARM can adjust to may be much higher than locking in the rates currently available.
If you have a fair amount of high interest rate charge cards, auto loans and second mortgages, consolidating these debts into one first home mortgage may be a wise thing to do. Make a list of all of your debt, the monthly minimum payments, the total amount owed and the interest rate that you are currently paying. In many cases your overall payments can drop if you have the equity in your home and you consolidate the debts into one loan. The trick to this action is to then not start charging on those credit cards again. That just increases your debt and can put you right back in the same bad situation.
So if you have an ARM or you have a lot of high interest rate bills, I suggest that you get with your friendly neighborhood mortgage professional as soon as possible. Make a stack of all of your statements, such as your mortgage statements, car loans, credit card statements and any other debt you may have. Also make sure you have a couple of your pay stubs to document your income and a couple of your bank and retirement statements. Then your mortgage professional can sit and review your situation based on fact in hand. They can show you how and if a refinance will work for you.
So don’t delay, call today. Your actions can place you in a much better financial situation for the upcoming holidays.
Bob Kieber can be reached at (970) 262-1199 or at firstname.lastname@example.org. He is a local mortgage lender and principal of Resort Lending.
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