Is Refinancing
Right for Me?
Time to Refinance?
Would you like more peace of mind by saving more for your family’s financial
future? Could you use more money in your pocket to make home upgrades,
pay off debt or make that next big purchase?
You may not realize it, but you have opportunities to save money with the
home you already have. Refinancing your home could increase your cash flow
if the right factors align.
Check out these top 5 opportunities that may indicate you should consider a
refinance right now:
1. Lower Your Interest Rate
2. Adjust the Term of Your Mortgage
3. Get Rid of Private Mortgage Insurance (PMI)
4. Change Your Loan Type
5. Save Funds for Upgrades to Current Home
Opportunity #1:
Lower Your Interest Rate
Have interest rates gone down since you last purchased or refinanced your
home loan?
Interest rates are directly tied to how much you pay on your overall mortgage,
and lower interest rates mean lower monthly payments. When the terms of
your loan stay the same, lowering your interest rate can possibly save you
hundreds—or thousands—off your total payment. Check with your loan officer
to pull your credit & ensure your score is in the best shape to get your best rate!
Here’s a sample of what you could save on a 30-year conventional fixed rate
loan of $180,000 at 5.5% vs. 4.0%.
Old Loan*
New Loan*
Current Balance/Loan Amount
$180,000
$180,000
Term
30 Year
30 Year
Interest Rate
5.5%
4.0%
Monthly Payment
$1,022
$859
Monthly Savings
$162
One-Year Savings
$1,952
Ten-Year Savings
$19,520
* Notes: This assumes at least 20% of equity in the home and a 740 credit score. The interest rate, annual percentage rate (APR) shown are subject to
change without notice.
The monthly payment shown includes principal and interest only. Your payment may be higher if an escrow/ impound account is required. Your APR
will vary based on your final loan amount. Stated rates and terms are intended as examples only. For a 30 year loan, a $180,000 mortgage loan with a
rate of 5.5% (APR 5.615%) with no points, would have a monthly payment of $1,022.02 (principal & interest). For a 30 year loan, a $180,000 mortgage
loan with a rate of 4.0% (APR 4.095%) with no points, would have a monthly payment of $859.35 (principal & interest).
Opportunity #2:
Adjust the Term of Your Mortgage
Did you know you can cut the length of your mortgage in half? Moving from a
30-year to a 15-year term saves you money by paying off the loan sooner. You
can also save thousands of dollars because interest rates on shorter loans tend
to be lower. Your monthly payments may be higher with a shorter loan term,
but you pay more toward your principal & spend less over the life of your loan.
Adjusting the length of your mortgage is a great option to maximize your return
on investment faster and prepare for owning your home mortgage-free sooner!
Crunch some numbers on the Mortgage Calculators on our
website at:cfimortgage.com/calculators. Check out the “Early Payoff”
Calculator to see how quickly you could pay off your home & reduce
the interest you pay by adding additional amounts to your monthly
payment.
Opportunity #3:
Get Rid of Private Mortgage Insurance (PMI)
What is Private Mortgage Insurance (PMI)?
Also known as PMI, private mortgage insurance is a type
of mortgage insurance you might be required to pay if you
have a low down payment. PMI protects the lender—not
you—if you stop making payments on your loan. Often,
you’ll pay PMI for the life of the loan if you don’t refinance.
Another reason to refinance is to remove private mortgage insurance. If your
original down payment was less than 20%, then chances are you’re probably
paying PMI. You can save a lot of money if your home has enough equity to
refinance and get rid of PMI once and for all.
Since home values have risen dramatically over the past few years, you may
have enough equity to allow PMI to be dropped. An appraisal will determine the
current value of your home. If your loan amount is 80% or less of the current
appraised value, say bye-bye to PMI and potentially save hundreds a month!
FHA
CONVENTIONAL
ARM
Opportunity #4:
Change Your Loan Type
Shifting from an FHA to a Conventional Loan
If your current home is the first home you purchased, your mortgage may
be with the FHA (Federal Housing Authority). Paying premiums for mortgage
insurance and other costs are common with FHA loans. With home values
continuing to rise, you may want to look into switching from your FHA loan to a
conventional loan program.
Shifting from an ARM to a Conventional Loan
If you have an Adjustable Rate Mortgage (ARM), your payments can change
from month-to-month due to adjustments in interest rates.
If you want the comfort and ease of budgeting that comes with a consistent
payment each month, then a fixed-rate conventional loan may be a good move
for you.
Opportunity #5:
You Want to Make Upgrades to Your Home
Upsizing remains difficult due to low inventory. Given this barrier, many people
are opting to renovate their current home instead of buying a new one.
If you’re thinking of improving your current home, we can help. Instead of
looking for a new place, you can stay put and upgrade your home with an
addition and a new loan to help finance it over time.
Let’s say you bought a house five years ago. The value of your home has gone
up and your family has grown. That’s all great news, but now you need extra
space. We can help you weigh your options so you can decide if it’s a better
choice to expand your home and avoid a more expensive move altogether.
APPLY
Starting a Refinance is Simple:
So, where do I begin?
Apply, then know what to expect in the process:
The approval process for refinancing is similar to the mortgage process you
went through when you first got your home. We look at everything from your
income, assets, credit score, other debts, current property values, and the total
amount you want to borrow.
Refinancing isn’t just adjusting the terms of your old mortgage, it’s swapping out
your existing loan with a new one. Your home will be appraised, your credit will
be checked, and changes may occur to your title and homeowners’ insurance.
One important thing you need to know is that you will incur new closing costs
unless you choose to finance those into the new loan. In order to know when
the costs incurred with refinancing will break even with your savings, review the
below example of an original loan rate of 6.0% and uses a $200,000, 30-year
fixed-rate loan at 5.0% with $2,500 in closing costs.
How to Calculate the Break Even Point
Current monthly mortgage payment at 6.0%
$1199
Subtract your new monthly payment
-$1073
Your monthly savings
$126
Divide total costs by monthly savings
$2500/$126
Number of months it will take to recover costs
19.8 months
* Important Notices:
For a 30 year loan, a $200,000 mortgage loan with a rate of 5.0% (APR 5.101%) with no points, would have a monthly payment of $1,073.64 (principal
& interest).* To give you accurate rate, we will require a credit report, and the fee will be collected at that time.
The rate quotes used in this report have the following assumptions: credit score above 740; property is SFR; borrower has suicient income to qualify
- The interest rates, annual percentage rates (APRs), discount points and rebates shown are subject to change without notice.
- The monthly payment amount shown includes principal, interest and mortgage insurance only. Your actual monthly payment will be higher if an
escrow/impound account is established or required. Your APR will vary based on your final loan amount and finance charges.
Closing costs are an estimate and are subject to vary based on the providers and other loan factors. Stated rates and terms intended as examples only.
Why Not Start Now?
Interest rates are at historical lows, but they can change at any time! If you’re
still on the fence about refinancing, you can speak with one of our trustworthy
loan officers who will give you the answers you need to make a confident
choice. With various companies offering similar products and services, we
understand it may be difficult to know where to start. That’s why our team at
Christensen Financial, Inc. is here to help you take the next step in making a
well-informed home financing decision that’s best for you.
Contact us to figure out what works best for your unique needs. We offer you a
free cash flow analysis with no obligation. We’re are dedicated to working with
you no matter your current situation. Could the benefits outweigh the costs?
Contact us to see.
Call us at 407-410-3069 or visit us online at www.cfimortgage.com to apply
today and get started.
860 N SR 434, Altamonte Springs, FL 32714
NMLS ID # 112516 (www.nmlsconsumeraccess.org)
(407) 410-3069
License(s): Alabama Consumer Credit License 21433 | Colorado Mortgage Company Registrant | DC Mortgage Dual
Authority License MLB112516 | Arkansas Combination Mortgage Banker/Broker/Servicer License 101560 | Florida
Lender License MLD129 | Florida Mortgage Lender Servicer License MLD1715 | Georgia Residential Mortgage Licensee
21045 | Illinois Department of Financial & Professional Regulations MB.6761311 | Kansas Mortgage Company License
MC.0025032 | Louisiana Residential Mortgage Lending Licensee | Maryland Mortgage Lender License 18626 |
Michigan 1st Mortgage Broker/Lender FL0017515 | Mississippi Mortgage Lender 112516 | Missouri Residential Mortgage
Broker License 19-2051 | New Mexico Mortgage Loan Company | North Carolina Commissioner of Banks L-181551 |
Pennsylvania Mortgage Lender License 32852 | Oklahoma Mortgage Lender License ML010110 | South Carolina BFI
Mortgage Lender/Servicer MLS-112516 | Tennessee 109381 | Texas SML Mortgage Banker Registrant | Virginia Mortgage
Lender/Broker MC-5371
TEXAS COMPLAINTS: CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL
MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT
OF SAVINGS AND ORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS
AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE
CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET
DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIAL MORTGAGE LOAN
ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH
AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT
THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.
* Important Notices:
To give you accurate rate, we will require a credit report, and the fee will be collected at that time.
The rate quotes used in this report have the following assumptions: credit score above 740; property is SFR; borrower has suicient income to qualify
- The interest rates, annual percentage rates (APRs), discount points and rebates shown are subject to change without notice.
- The monthly payment amount shown includes principal, interest and mortgage insurance only. Your actual monthly payment will be higher if an
escrow/impound account is established or required.
- Your APR will vary based on your final loan amount and finance charges.
Stated rates and terms intended as examples only.