CASH-IN REFIS…
Over the past years, many of Americans pulled money out their homes through “cash-out” refis. Today, many of my clients are bringing cash into their refinance transactions. Money is flowing in the opposite direction.
You might consider bringing cash to close your refinance to:
1. Lower your mortgage rate: If your LTV is close to the 80% Loan to Value (LTV) threshold, then bringing money to the table to push your LTV below 80% can get the borrower a better rate.
The same cash-in technique works for refinances on a Jumbo loan ($417,000 for single-family homes). Bringing in money to get out of a Jumbo bracket and into a Conventional loan can save a half percentage point or more. This technique works on a home purchase too.
2. Avoid PMI: Reducing your principal balance to an 80% LTV eliminates the burden of PMI. This can also works for a purchase too.
3. Pay off your mortgage faster: Putting cash in to limit the increase of your new payment when refinancing a 30-year loan into a 20-, 15-, or even 10-year mortgage is smart. Payments will be higher, but the interest savings can be huge over the life of the loan.
Other Variables to consider:
1. Recouping your closing costs. Is there a real benefit to refinancing when considering the cost to refinance VS. the actual savings of the refinance?
2. Credit Scores: One of the key variables determining interest rates is credit scores. Lower/marginal credit scores do not get the best rates.
3. Limited amount of cash available: Liquidity. If you have limited cash available, it’s not worth sacrificing reserves should misfortune strike.
St. Louis Mortgage Interest Rates – December 8, 2010
- 30-year fixed-rate 4.750% no points
- 15-year fixed-rate 4.250% no points
- 5/1 adjustable rate 3.50% no points
- FHA/VA 30-year fixed rate 4.625% no points
- Jumbo 5/1 ARM 3.500% no points
- Jumbo 15 year fixed-rate 4.250% no points
- Jumbo 30 year fixed-rate 5.500% no points
For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.
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