Is Now the Right Time to Refinance?

ITA18FXIBL

Even though interest rates are on the rise, they are still at historic lows. If you have an Adjustable Rate Mortgage (ARM), it may be a good time to consider refinancing your home.  If you have thought about refinancing in the past, but were worried about being locked into a rate, getting in on the current low rates could be very financially advantageous.  It’s expected that rates will continue to rise over the new months, so waiting too long to refinance may end up getting you a higher rate.There’s no one-size-fits-all answer to whether your should refinance, so here are a few of the main considerations:

How long does your introductory rate last?

DTCW08YNHE.jpg

Most ARMs have a fixed rate for the beginning of the mortgage. This is an introductory period (usually 3-10 years) when your rate will remain constant before it can be adjusted. If you have several years left in your introductory period, you can monitor interest rates for a while before making a decision. But if the intro rate is ending soon, it’s a great time to explore refinancing at a fixed rate.  Be sure to take note of what the rate cap is for your loan.  Usually, your APR cannot increase more than a certain percent during each period (so if you’re at 5% and you have a cap of 2%/year, your rate could go as high as 7%).  If you’re not willing or prepared to pay the max of what the cap could be, refinancing may be an excellent option.

How long are you staying?

9BHIKXDFSU.jpg

If you plan to sell your home soon—especially if you’re still on a fixed introductory rate—there’s not much motivation to refinance. But if you’ll be at your home indefinitely, you should consider your refinancing options. You could eliminate the stress of not knowing what your future mortgage rate and payments will be.  This also could allow you to put more into savings, since you’re no longer having to account for the possibility of a dramatic increase in your mortgage payment.

What’s your loan balance?

VVXW9WBTB8.jpg

The change in your mortgage payment will of course be determined in part by your remaining balance. If you owe $100,000-$200,000, a new interest rate may not greatly affect your monthly payment. On the other hand, if you owe $500,000, a change in interest rate could lead to a much higher payment.

Other factors

96E1A8F1CB

The previous items are just a few of the factors that should go into a decision about refinancing. Changes in income and your current credit score should also be considered, so be sure to weigh your options and make an educated decision.  Talk to a mortgage professional who can help you figure out if refinancing is right for you.  If you’re in the Portland area, I can point you to a lender who will work with you to figure out your best options.

Posted on May 10, 2016 at 6:38 PM
Sianna Johnson | Category: Finance, Real Estate | Tagged ,

What Does the Future Hold? 2016 Economic & Housing Forecast

There are so many things I love about working for Windermere, but what I love most is the access we get to information that I can pass along to all of you.  Now that 2016 is officially upon us, and we’ve started to settle back into post-holiday life, I wanted to share with you guys some numbers that we can use to figure out what to look forward to this year.

Windermere is fortunate to have Chief Economist Matthew Gardner on staff to provide valuable analysis of the economy and housing market. Matthew recently completed his national economic forecast which details his predictions for the 2016 economy and housing market.  I’ve added it here below for you.  Take a look, and let us all know what you think in the comments.  I think 2016 is looking to be a great year!

Matthew Gardner 2016 Forecast-page-001

Posted on January 11, 2016 at 11:48 PM
Sianna Johnson | Category: Finance, Real Estate | Tagged , , ,

What Does the Future Hold? 2016 Economic & Housing Forecast

There are so many things I love about working for Windermere, but what I love most is the access we get to information that I can pass along to all of you.  Now that 2016 is officially upon us, and we’ve started to settle back into post-holiday life, I wanted to share with you guys some numbers that we can use to figure out what to look forward to this year.

Windermere is fortunate to have Chief Economist Matthew Gardner on staff to provide valuable analysis of the economy and housing market. Matthew recently completed his national economic forecast which details his predictions for the 2016 economy and housing market.  I’ve added it here below for you.  Take a look, and let us all know what you think in the comments.  I think 2016 is looking to be a great year!

Matthew Gardner 2016 Forecast-page-001

Posted on January 11, 2016 at 11:48 PM
Sianna Johnson | Category: Finance, Real Estate | Tagged , , ,

How Much Cash Do You Need to Buy a House Today?

The other day, I was talking to a couple friends of mine that are starting their journey to home ownership.  They asked me a great question: “What’s the least amount of money we need to buy a house?”  Of course, there is no one magic number that I or anyone else can give that applies to everyone.  First things first,  to get the best picture of what you can afford, it’s imperative that you talk to a great loan officer.  They are the money experts, and they will be able to take a look at your pay stubs, bank accounts, credit scores, and any other financial materials to determine what you can afford.  They will help you figure out the right type of loan for your needs and how much you can be pre-approved for.

There are a few number you can look at to get a ball park range of what your costs may be, though.  Firstly, know that it’s not always necessary to put a 20% down payment.  There are loan programs available that range from the typical 20% we all know, to as little as nothing down.  FHA loans, which are insured by the government require 3.5% down.

The down payment is just the first chunk of money to pay attention to, however.  Buyers need to be ready to pay for inspections on homes they would like to put an offer on.  Inspections typically range from $300-$500, but can be variable by location.  Websites like Angieslist.com are a great resource for comparing costs in your area.  Expect to pay more as well if you plan on including a sewer scope or radon testing.  A lot of buyers are tempted to bypass these inspections to save some cash, but skipping an inspection can be more costly in the long run.  Finding out about defects in the home before you move in can give you some leverage in negotiations, and you may be able to get the seller to fix it or give you a credit at closing for any problems.  If nothing else, the peace of mind knowing that there are no hidden secrets in your home is worth the cost in my opinion.

Lastly, come the closing costs.  A good rule of thumb is that you will typically owe about 2.5% of the purchase price in closing costs.  Credit.com has a nice break down for price ranges when you’re putting down less than 20%:

  • For a home purchase between $500,000-$600,000, you’ll need at least $10,000 for closing costs
  • Between $300,000-$500,000, at least $8,000-$10,000 for closing costs
  • Between $150,000 $300,000, at least $7,200 for closing costs

Hopefully, this is a good jumping off point for you.  Again, to get a better grasp on what costs you’ll be paying, talk to a mortgage broker.  They’re the only ones who can give you real, professional advice.  If you’re in the Portland area and are looking for an excellent broker, contact me and I can put you in touch with one that will suit your home buying needs.

Did I miss anything?  Any other tips?  Let me know in the comments!

Miss my newsletter?  Email me to get signed up today!

Posted on October 12, 2015 at 7:56 PM
Sianna Johnson | Category: Real Estate | Tagged , , , ,