Gene's Chicagoland Mortgage Blog: November 2021

Does it Still Make Sense to Refinance MY Mortgage?

Does it Still Make Sense to Refinance MY Mortgage?

Recently, in just one short sitting, I read headlines touting a rise in refinance activity due to mortgage interest rates ticking downward ...

During the very same reading, I also read headlines saying the very opposite. Refinances are down and interest rates are (for now) holding fairly steady.

To the defense of the news sources sharing the articles, each may have accurately represented the information and facts as they stood at that precise time they were written.

But because of the speed with which financial trends develop and occur, by the time it could be read, the information and advice shared may have no longer applied. It may have been old, incorrect, and given readers a completely erroneous set of facts as they presently stood.

Staying on top of interest rates and mortgage industry trends can be daunting, even for a loan officer. Reporting them? Even trickier.

One fact regarding interest rates is undeniable. They have remained fairly stable and unbelievably low over the last few years.

I'm sure you've seen the term "historic low rates" utilized in many of the news articles and reports you've read. Consumers have had the benefits of borrowing money at low rates at their disposal for a long time now.

But because we've enjoyed low rates for so long, many current homeowners (and those buying homes too) with older mortgages carrying higher rates have been lulled into thinking that the "historic low rates" will last forever. That's not true, as interest rates have recently been fluctuating and/or moving slightly upward.

Many industry experts are predicting that this upward trajectory will continue. But does that mean that the window of opportunity for saving money via a refinance has closed?

The answer to that question lies in the specific finances, credit history, and needs of each individual asking it. And as I've written in the past, there's only one reliable way to get an answer ... talk to an experienced knowledgeable loan officer.

Only via that conversation will you discover if a refinance would prove:

Valuable to you monetarily in some way
Strategically wise for your finances, both in the short and long-term

Remember: Refinancing to lower an interest rate is not the only reason to refinance. Other very valid reasons exist.

Those can include:

Tapping into available home equity
Shortening the term of a loan (eliminate years of payments)
Eliminating Private Mortgage Insurance
Converting ARMS to Fixed Rate Loans
Paying off bills or credit card debt
Reducing monthly Payments
Buying out an ex-spouse after divorcing
More ...

As with their original mortgage, anyone refinancing generally must pay some costs at the time of closing. OR, eliminating the need to pay them at closing, closing costs can be covered by increasing the loan amount.

Closing costs are based on many things, including the interest rate the borrower secures, their credit scores, the current debt they hold, and more.

But generally, refinance Closing Costs (and pre-paid costs) include:

Appraisal Fee
Loan Origination Fee
Title Insurance
Homeowners Insurance
Taxes
More ... (Costs specific to the individual Borrower)

Both client and lender must be ready to react to fast-moving and fluid market indicators throughout the entire financing process. Response time and timing of any actions taken can make a huge difference as to the interest rate secured and ultimate success found.

Throughout the entire mortgage process, these old sayings remain more true ... "timing is everything" and "time is money".

Does it Still Make Sense to Refinance MY Mortgage? There's only one way to find out.

If you hold a higher interest rate mortgage ... want to put your home equity to work for you ... hope to eliminate your PMI ... or just want to evaluate your financing options, don't hesitate to contact me.

I will provide you the information and timely answers you need to make the decision that's right for you and help you find the financing solutions that fit your personal needs and goals best.

Are you hoping to Construct, Buy, Refinance or Purchase a home or investment property in Chicagoland or elsewhere in Illinois or Wisconsin? Looking for mortgage financing answers, options, solutions, and experienced assistance?

Contact me! I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.
I'm 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

www.genemundt.com

gmundt@goapmc.com

Gene Mundt, Mortgage Originator, an Originator with 40+ 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, Frankfort Square, Joliet, Shorewood, Elwood, Lockport, Wilmington, Crest Hill, Symerton, Braidwood, Channahon, University Park, Beecher, Plainfield, Bolingbrook, Romeoville, Tinley Park, Homer Glen, Crete, Peotone, Naperville, etc.), DuPage County, Kane County, Grundy County, the City of Chicago,

Cook County, and elsewhere within IL & WI.

Referrals are Appreciated & Welcomed!

Gene Mundt, Mortgage Originator - NMLS #216987, IL Lic. #0006220, WI Licensed. American Portfolio Mortgage Corp. - NMLS #175656 - IL Lic. #031.0006220

I am a 40+ year veteran of the mortgage/banking industry with extensive expertise and education in mortgages, appraising, management, and financial planning. My assistance is ongoing, as I provide info, advice, and service leading up to, during, and following my clients' mortgage financing process. I aim to develop trust-based relationships that encourages asking questions freely.

Preparing Your Finances & Credit for Holiday Shopping

Preparing Your Finances & Credit for

Holiday Shopping

Over the last few weeks, I've seen several articles, both in print and online, suggesting ... that if you plan on doing holiday shopping this year ... you should start and complete it early. The sooner the better. If you wait until Thanksgiving, Black Friday, or Cyber Monday, you may be a disappointed shopper.

This is especially true for those hoping to buy trendy or popular items as a gift. Supply chain issues, a shortage of workers, re-stocking concerns, manufacturers' availability, and delivery challenges are the main reasons noted as to why this shopping strategy is recommended.

As if all of those concerns are not enough, financial worries may enter into the festive season. Not surprisingly, holiday shopping can negatively impact your family finances.

And while that may be true every year, this year it could prove particularly challenging for some families. So establishing rules for this year's holiday shopping, in particular, is very wise.

How do you go about doing that? Planning how and where you shop is a good strategy and place to start.

Compile a list that includes:

A Budget: What is the total dollar figure you have to work with?
Names: Who will you want/need to buy gifts for?
A Breakdown: How much of that allotted budget will you spend on each individual gift recipient?
Gift Ideas: What ideas fit the planned expenditure for each gift recipient?

Why do I stress this?

As a loan officer, I've read each of my mortgage applicant's credit reports and seen their bank account(s). Far too often, holiday-related expenditures have contributed directly to their ongoing financial and credit challenges.

Both their credit report and bank accounts speak to this being the case. Each provides an accounting and reads like a timeline of the applicant's spending activities and credit actions.

Often, credit cards applied for during the holiday shopping season are revealed within a mortgage applicant's credit report.

Those very same credit cards result in financial/credit stumbling blocks as the added debt and resulting lower credit scores contribute to their financial and credit challenges. In fact, inquiries alone can impact credit scores lower, even if no debt results.

Unfortunately, what they did not know or forgot at the time they applied for the new holiday credit card was this: These promo credit cards immediately (and almost always negatively) affect credit scores. The very same credit scores they are reliant upon for mortgage approval.

And sometimes that dip in credit score is just enough that mortgage approval may be denied them. Or at minimum, their application and approval will have to wait until their credit scores rise again.

So as a result of this, heading into the upcoming holiday season, I recommend that you just say "NO" to new credit offers unless one of the following applies:

You know for a fact that your Credit/Credit Score can withstand a new credit inquiry
You can handle the new debt caused by a new credit card
You can make monthly payments on time, consistently, and faithfully
You will NOT be making application for a mortgage
You are NOT already in the mortgage process
You are NOT hoping to buy a home in the near future
You are NOT maxed-out on present credit cards
You have NOT already applied for other stores/credit cards
You know ALL the terms of the new credit account associated with the offer
You know what other credit obligations you have and the total of ALL your debt
The "enticement" offer is so valuable it offsets the negatives of taking on more debt
You have NO credit history and are trying to establish one for a future home purchase

Sharpen your resolve. Say and repeat the word, "NO!" if offered new credit, unless you fit one or more of the above. After the Holidays are over, you'll be very glad you did.

No matter your future plans and goals, but especially if you hope to buy a home soon or at some point down the road, you'll be so glad that you established and stuck by the holiday shopping rules you set. Your overall budget will remain intact and your credit report and scores will prove advantageous to meeting your financial goals.

The advice offered above regarding this year's upcoming holidays and holiday shopping is timely and well-warranted. Implement it along with the financial tips provided here and your holidays ... and those of the people you love and care about the most ... will be bright.

So will your financial prospects and future ...