Skip to main content

The Rule of Thumb For Rate Locks and Refinancing? There IS No Rule of Thumb


The Rule of Thumb For 
Rate Locks and Refinancing? 
There IS No Rule of Thumb


     Currently, I'm working with a young couple obtaining financing for a newly constructed home (started the process in February this year).  Last week, we reached the important step in their financing of "locking-in" their loan interest rate, as the home is nearing completion.

     At the time their mortgage application was taken, I quoted what that day's going rate was for their financing.  Because the markets had been moving up and down somewhat erratically at that time, I'd advised that we monitor them for a while and bide our time regarding a rate lock-in.  

     Why?  I felt the likelihood of catching a lower rate during a downturn was good ... especially since we "had time" while the house was being built.  My clients agreed.  We decided to remain patient.  

     Our patience paid off, as I was able to lock-in my client's interest rate at 1/2% lower than the rate they had originally reported as a goal.  That 1/2% represented real savings for them and they were thrilled.

     Now this couple can happily relate the benefits they'll receive from locking-in their mortgage rate.  They'll reap savings with each monthly payment.  Not bad!

     Old "rules of thumb" no longer exist for Refinancing either.  Low or dropping interest rates don't ensure a Refinance is right for you.  No, these days, finding benefit (or not) is to be found in a "recipe" of nuanced items.

     Years ago, the "rule of thumb" regarding Refinancing was very simple.  It completely revolved around interest rates.  

     What was the old "rule of thumb"?  If you'd realize a 1% (or more) drop in your interest rate, it was smart to Refinance. 

     Today?  You need to gather and analyze many more things prior to making a decision regarding Refinancing.  

     What are some of those things you should take into consideration?
  • What is your present interest rate?
  • How many years are left on your present mortgage?  
  • How long do you plan on staying in your present home?
  • What other debt(s) do you have?
  • What type of mortgage do you presently have?
  • What would be your "break even point" for a new Refinance?
  • What are you present Credit Scores?
  • More ...     


     Each of the questions
above will contribute to the overall analysis. Each will help define a final answer or solution.  Each will help reveal a path of action. 


     The answers are specific only to the individual asking them.  The answers are found within their overall financial scenario.  The answers are also dependent on the future plans they hold.  

     Because Truth is:  A "rule of thumb" for Refinancing and locking-in rates just doesn't exist any longer.  Each homeowner must avoid making comparisons to anyone else.  Each homeowner must seek and find the answers ... solutions ... and subsequent course of action specific to them.

     What's the best way to accomplish this?  Talk with a Lender. In Chicagoland (Illinois and Wisconsin), that's me.  

     Together, we'll analyze your present financial scenario and all options available to you.  We'll discover if Refinancing is the best financial course of action for you at this time. Then  we'll initiate a plan of action to help and assist you in successfully completing your goals, no matter what they are.

     Consider that plan of action your personal "rule of thumb", tailor-made to fit you and only you ...



 *    Hoping to Buy or Refinance a home in Chicago or elsewhere in the Chicagoland area? Contact me! I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf. 
     I can be easily found at:

Gene Mundt


Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656

Direct: 815.524.2280
Cell/Text: 708.921.6331

eFax: 815.524.2281


https://1609956119.secure-loancenter.com/FreeConsult.aspx
  
 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender  Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender 


Gene Mundt, Mortgage Originator, an Originator with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI. 

Referrals are Welcomed!      
           

      
      

     
     
     

     

      

      
     


Comments

Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...


“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.

Rem…

Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?


These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:


Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…