As reported in many recent media sources, interest rates on real estate loans are at historic lows. According, it is an excellent time to refinance everyone’s personal residence. Unfortunately with the decline in real estate values, some properties are “upside down” or will not appraise at a high enough amount to qualify for a refinance. But as long as the borrower’s credit is good, there are still opportunities to refinance.
There are several loan products available through Fannie Mae or Freddie Mac that allow high loan to value financing. The amount allowed under these programs can be up to 125% of the value of the property. These programs also may qualify for no mortgage insurance (DU Refi Plus). Homeowners may even consider reducing the loan term (for example from 30 years to 15 years.) With the lower rates for a 15 year loan, the new payment may be close to the old 30 year payment, while cutting years off the mortgage. Another possibility is to pay down the principal balance in order to qualify for a reduced loan amount.
The main message with this Tucker’s Tip is to tell “everyone you know” to call our excellent local lenders to discuss their specific situation and the availability of a refinance. A refinance at lower interest rates will usually mean lower monthly payments and more disposable money to help stimulate the economy. Let’s all do our part! Refinance now and Stimulate the Economy!!