when to refinance

Is Refinancing Right For You?

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In today’s housing market, many homeowners may see advantages in refinancing their homes. Individuals impacted financially by the mortgage crisis in the early to mid-millennia have taken advantage of low rates and have refinanced, in some instances, multiple times. So, you may wonder, is refinancing right for you? Well, there are a number of things to consider and certain criteria that you must meet in order to begin the process.

Let’s start first by looking at the two types of refinancing options: rate-and-term and cash-out.

Rate and term refinancing occurs when you want to change the interest or term of your current mortgage without increasing your loan amount (excluding possible closing costs). This is best done when interest rates drop substantially lower than your current rate.

The next kind of refinance is a cash-out. If you have equity in your home (you owe less than the home is worth), you may be able to refinance and get some of the equity out in cash. Homeowners can use the cash for any reason, but a common use is for home improvements, which may increase the value of the home.

The next thing you must consider and evaluate is your financial standing. Depending on your reason for refinancing, you may not be able to take advantage of the lower rates without exemplary credit as well as sufficient equity in your home, meaning the value of your property must be at an amount that is higher than what is owed on the mortgage. Also, there may be out-of-pocket costs, such as appraisal fees and other closing costs. You should determine if your refinance will cover the additional costs in the long run.

At the end of the day, deciding to refinance your house is a decision that should be made carefully but could ultimately improve your finances or your home, depending on your needs. Referring to mortgage professionals and getting specific help can be a smart choice.

Click here to contact a licensed mortgage professional.

Consult an advisor and check out our financial calculators before making your decision!

Reduce Your Debt to Income Ratio

Reduce Your Debt-To-Income Ratio

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In the wake of the home finance crisis that began in about 2008, obtaining a mortgage is now more difficult than it was before, but knowing the obstacles will help prepare you for buying a home.  Today’s lenders want to avoid the mistakes that bankrupted yesterday’s lenders.  Additionally, Government Sponsored Entities (GSEs) Fannie Mae and Freddie Mac have set much tighter guidelines that lenders must follow.  There are numerous factors considered when determining eligibility for a mortgage, but the three big ones are credit history, income and debt.

The debt-to-income ratio (DTI) is a valuable number that underwriters look at heavily when determining your borrowing ability.  To put it simply, DTI is the amount of debt you have compared to your overall income.  A low DTI shows lenders that you have a favorable balance between debt and income.

There are two main kinds of DTI and they’re expressed as a pair (front-end/back-end).  The front-end ratio indicates the percentage of income that goes towards housing costs (principal and interest, mortgage insurance, property taxes and homeowners’ association dues).  The back-end ratio is the percentage of income that goes towards paying recurring debts, including the housing costs covered in the front-end, plus credit card payments, car payments, student loans, child support, alimony, etc.  AmeriSave, one of the nation’s largest online lenders generally requires a DTI of 45% or lower for conventional conforming loans.

If you haven’t guessed it yet, one of the keys to unlocking the door of homeownership is reducing your debt-to-income ratio.  There are many things you can do to actively reduce your DTI so you can apply for a mortgage.

Increase your income – This might mean working some overtime, asking for a salary increase or taking on a part-time job.  Be advised though, as we mentioned earlier, income verification standards have increased greatly in the new age of lending so be mindful that cash or otherwise non-reported earnings will likely not count toward your “income”; although it could be used to reduce debt to the same effect.

Reduce spending – Review your bank and credit card statements to see where you are spending most of your money.  Cut back on unnecessary expenses and research other providers of insurance, phone, cable and other utilities to see if there are lower-cost alternatives.  Plow those savings into reducing your debt.

5 Ways to Cut Costs and Save

Reduce debt – A high DTI is not necessarily bad if you’re actively reducing debt.  For example, if your income is $2000 per month and you’re putting $1000 towards debts, your DTI is temporarily 50%, but will be reduced to 0% when you’re finished.  If you have any cash saved, you might want to consider paying off some debt.  While credit cards have high interest rates, the minimum payments are typically lower than, say an auto loan. Consider this scenario:

You have credit card debt of $5000 with a minimum payment of $120 and an auto loan with $5000 remaining and a payment of $600.  The $600 per month towards the auto loan reduces your borrowing power by $100,000, so you may want to consider using the savings to eliminate the auto loan and continue paying monthly towards the credit card.

If you plan on paying off any debts in full, ask the creditor the date they report to the credit bureaus, then apply for the mortgage after your account has been updated, revealing less debt.  You can also track changes to your credit report with free services like Credit Karma.

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Choosing A Refinance Company That’s Right For You

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There are many different motives behind why homeowners may choose to refinance their mortgages. Perhaps they are simply trying to obtain a lower rate, shorten the length of their mortgage term, switch mortgage types, or any other number of reasons. However, regardless of their intention for refinancing, deciding on the perfect lender for their specific needs should always be a top priority.

When it comes to choosing a mortgage lender, many borrowers’ top focus is on pricing. People want to go with the lender that’s going to give them the better deal. Even though pricing is the number one priority, there are other things to consider as well such as the loan programs offered, and the ease of working with the lender.

At AmeriSave, great rates and technology that makes obtaining a mortgage easy and efficient are our top priorities. We offer in-house processing, underwriting, closing, and funding, so that we can offer our very best rates and minimize delays.

It’s important to compare rates from multiple mortgage lenders to ensure you are receiving the deal that’s best for your needs. However, when comparing rates, keep in mind that in order to get the most accurate picture, you should compare rates for the same type of mortgage on the same day because the market changes daily. You will also need to review the cost of title insurance, closing/attorney and appraisal. Your Loan Estimate will show a breakdown of those fees.

For the financially savvy, refinancing your mortgage can be a very lucrative decision. Make sure you pick a lender that is going to offer you the best savings and meets all of your requirements. Head over to amerisave.com and get your rate locked in under ten minutes!

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What You Need To Know About HELOCs And The New Tax Reform Bill

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On December 20, 2017, President Trump signed into the law the Republican tax reform bill which went into effect at the start of 2018. With that, a number of changes have been made to our tax code, specifically, home equity loans and lines of credit. In the new bill, you can no longer claim a deduction for the interest paid on HELOCs. So, what does this mean for you?

First, let’s start by defining what a home equity loan is. Basically it’s when a homeowner receives a loan using the equity in their house. The equity is the difference between the home’s mortgage balance and its market value. Homeowners can either take out a onetime loan with a fixed interest rate, or a line of credit which is similar to a credit card with a debt limit based on your home’s equity.

Previously, homeowners who took out a home equity loan could deduct up to $100,000 in interest from their taxes; under the new law, that is no longer the case. For homeowners with available home equity they want to borrow against, they may find themselves at a crossroads. Now that interest isn’t tax deductible, the benefit of home equity loans and lines of credit may be reduced, but homeowners can utilize a different financing option such as a cash out refinance.

A cash out refinance is a way to receive cash for your home’s equity. It works by refinancing your mortgage for more than you currently owe and receiving the difference in cash. Right now, rates are still looking great, and if you’ve increased your credit score or equity in the past couple of years, a cash-out refinance could be a viable option. For more information on starting a cash out refinance, visit refinance.

AmeriSave Mortgage Corporation does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Our Best 2018 Mortgage Tips

Our Best Mortgage Tips For 2018

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Are you purchasing or refinancing a home in 2018? Check out our mortgage tips to help you have an awesome mortgage this year!

Tip #1 – Build up your reserve savings

You may have enough for your down payment and closing costs but if the payout depletes your savings, you could still run into some issues. Typically, mortgage companies want you to have a savings fund in case unexpected expenses occur, so your house payment won’t be affected.

Tip #2 – Consider refinancing into a 15-year loan

This is dependent on a number of factors and you should seek financial advice before making this decision, but if circumstances make financial sense, a 15 year mortgage may be right for you. 15-year mortgages usually have lower rates than 30-year mortgages. Although monthly payments will be higher, you’ll be paying more to principal right away than you would with a 30 year loan, and you’ll pay significantly less interest over the life of the loan.

Tip #3 – Live within your means

A good rule of thumb is to buy the home that you can comfortably afford now, not the home that you can afford in the future. What that means is even though your future financial earning potential looks bright, you should still borrow what you can afford based on your current earnings. You can always upgrade your home after your income increases!

Tip #4 – Take advantage of a cash-out refi

A cash-out refi is a home mortgage refinance for more than the amount owed where the borrower is able to keep the difference. This can be a way to consolidate high interest debt with the goal of saving you money in the long run.

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Don’t Let The Fear Of Rising Rates Take You Out Of The Race!

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With a new government administration set to take office, the mortgage industry is in for some changes, which is to be expected with any new elected president. Since the election, Americans have seen an aggressive increase in mortgage rates, which are currently siting at their highest level since May 2014; that, along with the news that the federal reserve voted to raise interest rates, has borrowers wondering how the new changes will affect their lending options. However, fear of rising rates shouldn’t be a deterrent considering they are still reasonably low.

According to a survey done by Freddie Mac, last week the average rate for a 30-year fixed-rate mortgage was 4.13%, this week the rate rose to 4.16%. This time last year, the average rate was 3.97%. This means, if a borrower were to put a 20% down payment on a $241,000 home today, they’d only be paying about $21 more each month compared to what they would have paid a year ago.

Right now the fear of rising rates has painted a doom and gloom picture on the mortgage industry that is far from the truth. Rates under 5% have been the norm for the last decade, and we have quite a way to go before that changes. Perspective is key when examining rates, and by historical standards, rates are still looking great for 2017. Consider this, if interest rates were to increase another 25 basis points, the change in mortgage payments would be insignificant.

If you’re in the market for a new home or considering refinancing your mortgage, now may be the time to act! Let AmeriSave serve your mortgage needs. Check out our rates today!

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Refinance Applications Drop As Purchase Applications Rise

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The post-Brexit refinance frenzy seems to have leveled off, but that doesn’t mean borrowers aren’t taking advantage of current low rates; purchase applications have started to see an increase.

According to data, refinance applications fell by 1% this week after seeing an increase of 24% over the past 4 weeks, while purchase applications saw a 23% rise compared to last week.

Overall, mortgage borrowing has increased to the highest we’ve seen in the past three years, with many experts predicting a new wave of refinancing and believing that rates will hold steady in coming weeks.

Nothing’s a sure thing in the world of mortgage rates, but the current numbers are some of the best we’ve seen. Head over towww.amerisave.com to view today’s rates and get a quote in minutes.

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Why Now Is A Great Time For A Mortgage Refi

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Mortgage rates continue to linger near all-time lows and refinance applications are through the roof. With the 30-year fixed rate sitting just above the all-time low rate at 3.52% (the record low being 3.5%) you can see why so many borrowers are taking advantage of these rates.

The end of the July 1st week saw a 21% increase in refinance applications with a 30-year fixed rate at 3.61%. Experts expect to see another surge in refi apps at the new lower rate. If you’re looking to refinance your home, now could be the time to do it. Although no one can give a definitive answer on how long rates will remain this low, you can’t argue that a 30-year fixed rate under 4% is a great deal comparatively.

Make sure to speak with a loan officer or mortgage professional and make the decision that’s best for you!

Give us a call at 866-970-7283 or https://www.amerisave.com/rates

Brexit

Mortgage Rates Plummet After Brexit Vote

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Since the United Kingdom shocked the world and voted in favor of a British exit from the European Union, mortgage rates have plummeted to historic lows reminiscent of the all-time low recorded in November 2012, with only a 17 basis point difference.

For the week of June 30, 2016, the 30-year fixed-rate mortgage is averaged at 3.48%, a decrease from last week’s 3.56% and last year’s 4.08%. The 15-year fixed-rate mortgage is averaged at 2.78%, decreasing from last week’s 2.83% and last year’s 3.24%.

According to the Mortgage Bankers Association, despite the plummet in rates, mortgage applications actually went down 2.6% from a week earlier.

Many experts believe this is only the beginning of rate drops, while others believe this decrease will be short lived. How long will these historically low rates last? Only time will tell.

The-Benefits-Of-An-Online-Lender

The Benefits Of An Online Lender

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It’s 2016, and in a time where computers, tablets and mobile devices are increasingly changing how consumers do business across all markets, mortgage lenders are finding that they must adapt to the needs of their borrowers. AmeriSave Mortgage Corporation consistently stays ahead of the curve. Since 2002, AmeriSave has been able to offer current mortgage rates in a matter of seconds, becoming one of the nation’s largest online lenders.

For majority of consumers, the internet isn’t just affecting how they do business, but how they receive information. That’s why establishing a site that is not only functional as a transactional tool, but also an information hub for current rates, has boosted AmeriSave up as one of the leading mortgage lenders in the United States. With various home purchase, mortgage refinance and home equity calculators, you can determine for yourself the best options that will fit your needs.

AmeriSave’s online presence allows borrowers to apply for loans directly from the website while receiving the expert customer service generally associated with brick and mortar businesses. Thanks to its straightforward ease of use, AmeriSave allows you to cut out the middleman and begin the mortgage process yourself online; thus allowing you to start your mortgage process with a pre-approval so that you have an idea of what you can afford while also showing potential sellers that you are a serious buyer.

With convenience and ease at your fingertips, getting a pre-approval is literally a click away. Apply now