If interest rates have seasons, this is the season to consider refinancing your existing mortgage. Take your purchase somewhere else because I'm too busy dropping existing rates for my clients and its more gratifying to work on pre-approvals and loans that may not close. With a purchase you may never land on a home, you may not like the inspection, the appraisal could come in low, or my favorite you could find out the agent withheld pertinent information and that information killed the deal when revealed. I only get compensated if your loan closes and you are happy. :) Also when you are ready to drop the rate on your purchase call me, you will be glad you did.
This is a mortgage holders market, but yet the banks are raking some clients over the coals. Let me explain, its an interesting situation, because the banks had a taste of this back on 12/21/12. They gave out loans at the lowest rate available and kept the same margin as usual, however this had a negative impact turn times causing many clients to have to wait up to 6 months to close with banks like Bank of America. This time they were prepared and when rates fell, they held their pricing to prevent the poor service and slow turn times.
Here is what you need to do, shop around, I recommend 3 quotes from 3 lenders all in the same hour. Don't waste too much time, just call them, don't inquire online, you will get more calls than you bargained for. Say i have x loan amount, x home value and my credit score is this, what is the lowest rate you can get me for free, and what is the lowest rate available and the total closing cost to get it. Ask for the payments to be based on no funds due at closing and make sure you tell all three of them if you want your taxes and insurance built into your payment or not, this affects pricing with many lenders.
Write down all the answers and then compare. First determine who has the best offer, then determine what is better for you, lowest rate with cost, or lowest rate for free? If you may not qualify for a refi in the future, you may want to take the lowest rate. If you pay closing cost, divide the monthly savings from the free option by the cost and that is how many months you will need to keep that loan before the cost actually starts saving you money.
Example, 3.0% is FREE and your payment is $123 a month vs 2.5% for $5k in fees and payment is $100 a mo. Take $5k divided by $23 = 217 months, thats a pretty risky loan since rates will probably be negative or 0% in 217 months and even if they weren't, you may need to pull cash out or move before that much time goes by. Almost nobody keeps a loan more than 5 years.
Last if you have been listening to the President and Mr. Buffet, you would have heard them say rates are going to be negative here in America, its already that way in the more developed parts of the world.
If you have a home in CA, save your self some time and money and make me one of your 3 calls.
Michael James Hansen
Real Estate & Mortgage Broker
USAF Veteran
Phone: 619-992-3637
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Loan Officer: NMLS:344532 | CA DRE:01885141 | AZ DFI:0939162
Company: NMLS: 1579006 | DRE: 02013073
