Pick up the phone | You Should Call Your Mortgage Lender in 2017

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We all fall into the same bad habit: Once we take out our mortgage loan, we tend to forget about it – at least until it’s time to send in our payment each month.

U.s Dollar Bills Pin Down on the GroundBut vow to take a different approach in 2017. Instead of mostly ignoring your mortgage this year, take an active role in managing it.

To do this, give your mortgage lender a call. You might be able to tweak your home loan so that you can save some serious dollars this year. Here are three big reasons to call your lender, and take control of your mortgage loan, this year:

It might be time to refinance: Mortgage interest rates have been low for a long time. And they continued to drop throughout the end of 2016. So maybe it’s time to talk with your mortgage lender about the possibility of refinancing your home loan.

Sure, a refinance isn’t free. But if you can drop your interest rate by a point or more, you’ll generally pay back your upfront investment quickly. If you plan on staying in your home for more than five years, the odds are good that refinancing your loan to one with a lower interest rate might make financial sense.

You’ll never know, though, unless you give your lender a call. Your lender will be able to run the numbers to determine if a refinance is the right move.

You might be able to eliminate a ton of interest by shortening your loan’s term: Maybe your interest rate is already low. You can still save money by refinancing your mortgage loan to one with a shorter term. Say you are paying off a 30-year fixed-rate mortgage today. By refinancing to a 15-year version of this loan, you can reduce the amount of interest you’ll pay over the life of your loan by tens of thousands of dollars.

Again, though, you should talk to your mortgage lender to determine whether the interest savings make the cost of refinancing worthwhile. A lot of this depends upon how long you plan to live in your home.

You might be able to pay off your mortgage early—but doing so might not make sense: Maybe you’re coming to the end of your mortgage loan’s lifespan. That’s good news. You might even be tempted to pay off your loan early just to get rid of the monthly payment.

But often, paying off a mortgage loan early isn’t the wisest of moves. Again, checking in with your mortgage lender might be in order.

Mortgage debt generally comes with lower interest rates than do other forms of debt, especially credit-card debt. If, then, you are paying off this kind of debt, it makes more sense to concentrate your money on reducing it than it does to pay off your mortgage loan early.  kaybakerassociates@ec.rr.com

www.cbbaker. com

Categories: mortage planning, Mortgage choice, Mortgage Fine Print, Mortgage ideas

Want To Save Big Dollars? Pay Your Mortgage Bi-Weekly

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river2We get it. No one really enjoys making a mortgage payment each month. But here’s a secret: You can shorten the length of your mortgage loan without refinancing your loan to a shorter term.

You simply have to make bi-weekly payments.

Here’s how this works: Normally, you’ll make 12 mortgage payments a year, one each month. If you owe $1,000 on your mortgage each month, you’ll make 12 mortgage payments for a total of $12,000 a year. But if you split your payment into bi-weekly payments, you’ll pay $500 every two weeks.

This pays off in a big way: Because there are 52 weeks in a year, you’ll make 26 bi-weekly payments. That is equal to making 13 monthly payments in a year. That’s right, with the bi-weekly mortgage payment, you’d make one extra mortgage payment each year than you would when paying 12 standard monthly payments.

Bi-weekly payments reduce the payoff time of your mortgage loan. The number of months you chop off your mortgage varies depending on the size, interest rate and length of your loan. If you are paying off a 30-year, fixed-rate mortgage loan of $180,000 with an interest rate of 4%, you’ll pay off your loan in 25 years and 11 months, eliminating four years and one month of payments. That means you’ll also save more than $20,000 in interest during the life of your loan.

Those are some compelling reasons to consider a bi-weekly payment plan. Call us today if you are interested. We’ll walk you through the process and help you make the right decision for your financial situation.

Categories: Mortgage, Mortgage 101, Mortgage choice, Mortgage ideas, Mortgage options, Mortgage points, mortgage rates, Mortgages, MPP mortgage, Uncategorized, Wilmington NC Neighborhoods

SMORGASBORD When You’re Ready For A Mortgage You’ll Have Plenty Of Choices

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jones 91011 268This is a great time to apply for a mortgage loan. Interest rates are still low. Many borrowers are able to qualify for rates under 4%. And even better? Mortgage lenders today offer a wide variety of loan types. Borrowers with solid credit scores should have little trouble finding a home loan that works for their varied financial situations.

Here’s a look at some of the choices on the most popular mortgage smorgasbord available today. If you need help choosing, give us a call. We’d be happy to discuss your options.

30-Year Fixed-Rate: The 30-year fixed-rate mortgage (FRM) loan remains a favorite among borrowers. And why not? This mortgage comes with lower monthly payments because of its long life. Plus, the interest rate is fixed, so borrowers always know how much they’ll pay in principal and interest each month. (Your payments can still change, though, if taxes or insurance bills increase or decrease.) The downside? Because repayment is spread out over three decades, borrowers who pay off a 30-year loan in full will pay a lot more interest than those with different loan types.

15-Year Fixed-Rate: The 15-year fixed-rate loan comes with all the benefits of the 30-year version. But borrowers will pay far less interest each month because the repayment period is cut in half. The interest rates attached to 15-year mortgages are also lower than those that come with 30-year loans. However, because of the shorter term, a 15-year mortgage does come with higher monthly payments.

Hybrid ARMs: An adjustable-rate mortgage (ARM) features interest rates that are fixed for a certain number of years, often five, seven or 10. After that fixed period ends, though, the interest rate adjusts on a pre-set schedule according to the performance of whatever financial index the loan is tied to. Hybrid ARMs come in several varieties, but they all operate similarly: The 5/1 ARM, for instance, features a fixed-rate period of five years, while a 7/1 hybrid has a seven-year fixed period before the interest rate begins adjusting each year. The main benefit of these loans is the low initial interest rates that come with them. ARMs usually start with interest rates that are lower than those attached to fixed-rate loans. It’s important, though, for consumers to understand just how high their rate can jump each year once their loans enter the adjustable period and how that affects their payment—and ability to pay.

5/5 ARM: The 5/5 ARM is a relative newcomer. In this type of ARM, the interest rate is fixed for five years, then can adjust once every five years until the loan is paid off, the owner refinances it or the owner sells their home. This loan combines the low interest rate of an ARM with a bit of the stability that comes with a fixed-rate loan. Another variation is a 15/15 ARM.

Categories: Mortgage choice, Uncategorized


Kay Baker Associates | 1001 Military Cutoff | Ste 101 Wilmington, NC 28405 | kaybakerassociates@ec.rr.com | 910-202-3607 | Fax 910-338-2428

Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.