How to Know if the Time Is Right for Mortgage Refinancing

Right for Mortgage Refinancing
You may have heard in the news recently that the Federal Reserve raised interest rates again. You may have also heard now is the time to consider mortgage refinancing before the rate increase affects home loans. How can you know if the right time to refinance is now? Let’s look at some key indicators you can use to help you decide:
  • Your credit score has improved. If you had so-so or good credit when you first obtained your mortgage, you could be paying a much higher rate of interest. Refinancing could bring the rate down, as well as lower your monthly payments.
  • The interest on your current mortgage is higher than current rates. Lowering your interest rate with a rate and term refinance will help you save money over the length of the mortgage.
  • You want to make home improvements. If you want to add on a room, finish your basement, or renovate your kitchen, a cash-out refinance could be a good choice.
  • You want to pay off high-interest You could save money in the long run by paying off high-interest debts with a cash-out refinance.
  • You have an adjustable rate mortgage (ARM). With an ARM, whenever rates increase, the interest rate on your loan also goes up. If you want to lock in a fixed rate, you should consider a rate and term refinance.
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Five Common Home Loan Mortgage Myths Debunked

Purchasing a home is supposed to be fun and exciting. While shopping for homes, you may hear several myths that can leave you feeling discouraged. Before you give up on your dream of owning a home and being approved for a home loan, let’s debunk some of the common myths.
  1. “You need a 20% down payment.” Fortunately, there are different mortgage programs that have a much smaller down payment requirement. For instance, FHA loans have a minimum down payment of 3.5%.
  2. “You will not be approved if you are self-employed.” Just like a regular job, the lender will want to see relevant self-employment history over a period of time, along with documentable income.
  3. “Prequalifying means you are already approved.” With prequalifying, the lender provides you with an idea of the amount you could be approved for but does not guarantee you are approved. If you want to be approved ahead of time, you must apply for a preapproved mortgage.
  4. “You must have good-to-excellent credit to get a mortgage.” There are mortgage programs for people with less-than-stellar credit. Granted, your interest rate tends to be a bit higher, but you can still be approved to buy your dream home.
  5. “Your debt-to-income ratio must be no more than 30%.” This is not true, as there are loan programs and lenders that will allow you to go up to 40% or sometimes higher.
For assistance in applying for a mortgage or to find out what loan programs you could qualify for, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today!
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Is It Possible to Save While Paying Off a Mortgage Loan and Other Debt?

Types of Home Loans

One of the biggest struggles for most people and families is being able to set aside earnings into a savings account while paying off a mortgage loan and other debt. Instead, it can seem much easier to just charge any expenses above your income to credit cards and pay them later.

Yet, this is not the best approach because you are going further into debt. Not to mention, you will have all that added interest to pay back. It is better to create a savings plan to have access to cash when you need it, by using these tips:

  1. Create a budget. You need to know where your money is going each month.
  2. Reduce expenses. Look for expenses you can cut down, like dropping to a lower cell phone package, turning off cable, using coupons at the grocery store, and so on.
  3. Pay yourself first. You should make it habit to pay yourself between 5% and 10% of your take-home income each pay period. Put this money automatically into savings.

Using these three tips can help you save money while paying off debt. Any extra money you have left at the end of the month can either be put into your savings or used to pay down credit cards or other debts.

To learn more about different types of home loans to buy or refinance a home, and other money saving tips, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today!

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Pros & Cons of Building Up an Emergency Savings Fund

Emergency Savings Fund

Saving up an emergency savings fund can make a huge difference when a financial crisis occurs. Even if you are already on a tight budget, it does not mean you cannot slowly build an emergency savings fund. Start small and go from there. Start with the small goal of saving up $100. Once you hit $100, go for $200, and so on.

Pros of an Emergency Savings Fund

  • Provides peace of mind for when financial emergencies occur.
  • Your money earns interest and is safer and more secure at your bank.
  • The cash is more liquid and does not require selling stocks or bonds.
  • It is easy to make cash withdrawals or transfer it to your main checking account.

Cons of an Emergency Savings Fund

The only drawback to having an emergency savings fund is it can be tempting to dip into it for other reasons like that much-needed vacation, to pay down credit card debt, or to invest it for a higher yield return.

Even you are tempted to do these things—don’t. The whole purpose of an emergency savings fund is to have easy access to cash to pay bills or take care of other unexpected expenses like a new hot water heater for your home.

If you find yourself in a financial emergency and do not have enough set aside in your emergency savings fund, you could use part of the equity in your home with a cash-out refinance. To learn more about refinancing your home and converting equity into cash, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today!

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What’s Missing from Millennial Budgets

Missing-from-Millennial-Budgets

As a millennial, you may soon consider home loans, such as an FHA loan, and be looking to a mortgage broker for help. A budget is critical if you dream of home ownership. Before you can compare FHA mortgage rates, a budget and what may be missing must be considered.

Millennials’ budgets today are often missing:

A long-term plan: Achieving financial stability requires reducing unnecessary spending. Look at your routines and methods of saving; investment apps are popular, but fees and links to credit or debit cards can ultimately make it harder to obtain home loans.

Emergency cash: Many millennials aren’t building up emergency savings. Three to six months of expenses saved can be a buffer if, for example, you lose your job or need car repairs or help with other unexpected bills.

Savings for retirement: A Wells Fargo study in 2016 found 41% of millennials had not started saving.1 Your budget should consider sources of income, such as 401(k) savings and Social Security. A retirement calculator can help visualize medical expenses, FHA mortgage rates, and other costs.

Negotiating skills: The ability to negotiate helps one get a fair salary increase, get a lower monthly rate on a cable/internet package, or refinance a mortgage. Later, when you may seek a fixed rate mortgage, cash out refinance, or rate and term refinance, this skill can come in handy.

When it comes to FHA loans or VA loans, Elite Financial can help. Contact us for assistance with getting a mortgage loan for the home of your dreams. For information on types of home loans you may qualify for, get a quote online or call our mortgage company at (805) 494-9930 today.

Source

  1. https://www08.wellsfargomedia.com/assets/pdf/commercial/retirement-employee-benefits/perspectives/2016-millennial-retirement-study.pdf
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