Refinancing in Today's Market

Will the Big Banks Leave You Unable to Refinance?

Today's refinance market is unlike anything in modern memory. With rates continuing to hover at historic lows, some homeowners seem content to sit on the sidelines and wait to see if rates will fall even further. Many of these homeowners are passing up on the immediate realization of savings for the possibility of slightly more savings in the future.

However an ever increasing number of homeowners are starting to see their options dry up. It's no longer just a question of "Will rates drop further?" but now there is the added question of "Will I still qualify if they do?"

At America's Mortgage Choice, we want our current and potential clients aware of all the pitfalls they may face when attempting to refinance. That is why we put together this video to the right, that introduces some harsh realities about the current mortgage market.

Banks are phasing out programs and tightening guidelines almost on a daily basis. Every day more and more homeowners become ineligible to refinance without losing their job or missing a payment.

If you are considering taking advantage of the current mortgage market, we urge you to act today! Reach out to your America's Mortgage Choice loan officer, or enter your info below to have an exploratory conversation about your financing options.

How You Can Save $100,000 by Refinancing

Another segment of today's homeowners have a different objective when it comes to refinancing their existing residence. The traditional thought over the last few years has been to take every drop in rate as an opportunity to save money monthly. The usual strategy has been simple; a drop in rates equals a drop in monthly payment. Most folks who have had more than one mortgage in their lives have followed rates down into the low 6%s or high 5%s.

This drop in interest rates is different though. The financial statements we see from customers every day have several negatives compared to those of a year or two ago. The retirement accounts are smaller and the value of the property has dropped, reducing the average equity in the home. Combine this with adjustable rates and the stereotypical 30 year fixed refinance may not make sense.

This combination has caused people to reasonably reassess the remaining time on their mortgage. If you have been paying a loan for five or ten years, going back out to 30 years can often not be a worthwhile trade for $100 per month in savings. Many clients are now opting for 20 or 15 year fixed loans with the modest increase in payment being worth it for the long run savings.

How much savings you may ask? Well the answer depends on a combination of the interest rate, balance and length of time the current loan has been in place combined with the interest rate for the new mortgage. This calculation should be done though and a sample of how it should look can be found in the video to the right.

For most families this strategy is a winner on two key fronts. The additional principal pay down can help rebuild equity lost in the housing crisis. The elimination of years of payments on the back end of the loan can help retirement or college planning.

The changes in our finances over the last couple of years mandate that we look at our mortgage in a new way. Run the numbers and see if taking advantage of today's interest rate market and reducing your term could work for you.

America's Mortgage Choice

17W635 Butterfield Rd, Suite 300

Oak Brook Terrace, IL 60181

Ph: 630.368.3300

Fax: 630.368.1688

IL Residential Mortgage Licensee, Equal Housing Lender