Provided courtesy of: http://www.mortgagenewsdaily.com/consumer_rates/
Mortgage rates held on to their recent improvements today after the important Employment Situation (the big "jobs report") showed November job creation was lower than expected. In general, weaker job creation is good for interest rates because it speaks to slower economic growth and inflation (both of which are enemies of rates). This report was particularly important because a strong result would have cast doubt on several speeches from members of the Federal Reserve. Those speeches have warned about slower economic growth in 2019 and the potential for fewer rate hikes than previously anticipated....(read more)
Mortgage rates dropped significantly yet again today, adding to an already impressive week of improvement and bringing most lenders into their best territory since September 13th, 2018. The average lender improved by more than an eighth of a percentage point in just the past 3 business days and by nearly 3/8ths of a point from the highs seen in early November. This comes out to roughly $70/month for a $300k loan, or an upfront savings of $4500 if you were to buy your rate down (paying points) back in early November....(read more)
Mortgage rates technically hit their lowest levels in exactly 2 months yesterday. Today merely takes them deeper into that territory. The size of the improvement is less impressive and less meaningful compared to that "lowest in more than 2 months" talking point. That said, taken in conjunction with the last 4 business days, the average lender is roughly an eighth of a percentage point lower. That comes out to $7/mo for every $100k financed (or $21/mo on a $300k loan).
On a somewhat frustrating note, mortgage rates didn't experience nearly as big of a move as the broader bond market. For instance, 10yr Treasuries--the most widely-used benchmark for longer-term interest rates) dropped 0.05% today. Mortgages only managed to drop by 0.02% in terms of effective rates....(read more)
A refinance occurs when a business or person revises a payment schedule for repaying debt. Mechanically, the old loan is paid off and replaced with a new loan offering different terms. When a company refinances, it typically extends the maturity date. Companies or individuals refinancing loans may have to pay a penalty or fee.
BREAKING DOWN 'Refinance'
The most common forms of consumer debt are mortgages, car loans and student loans. The borrower agrees to make certain payments based on a rate of interest. Companies operate the same way. The most common types of corporate loans are term loans, bonds and lines of credit. The company agrees to the terms of each loan type, and the bank lends it money. Terms provide the details of the loan and specify the interest rate, payment amount and payment date(s).
When the terms of the loan are revised in a way that changes the payments associated with the loan, the loan has been refinanced. In a refinanced loan, the old loan is paid off with the new loan, and the old terms are replaced with new terms. Some loan terms come with fees associated with prepaying, which makes refinancing less rewarding. The most common changes in loan terms are maturity date and interest rate.
Borrowers refinance for a myriad of reasons. A common goal is to pay less interest over the life of the loan. Borrowers may also want to change the duration of the loan or switch from a fixed-rate to an adjustable-rate mortgage, or vice versa. The reasons and motivations behind refinancing a loan are as varied as the loan types offered.
Refinance Loan Types
There are several different types of refinancing options. The type of loan a borrower decides on is dependent on the needs of the borrower. The most common type of refinancing is called the rate-and-term. This occurs when the original loan is paid and replaced with a new loan. Another type of refinancing is the cash-out. Cash-outs are common when the underlying asset collateralizing the loan increases in value. The transaction involves withdrawing the value or equity in the asset in exchange for a higher amount. In other words, when an asset increases in value on paper, you can gain access to that value with a loan rather than selling it. This option increases the total loan amount but gives the borrower access to cash immediately while still maintaining ownership of the asset. Another refinancing option is referred to as the cash-in. The cash-in refinance allows the borrower to pay down the loan for a lower loan-to-value ratio or smaller loan payments.
Like many other Americans, you may be considering using the equity you've built in your home to re-invest in your dreams or consolidate debt. A mortgage refinance allows you to borrow additional money on your mortgage, so you can afford the things you've always wanted. It will also help save you money and help consolidate your debt into one convenient payment.
Mortgage refinance can prove beneficial in several ways:
We help you decide whether it is the right time for you to refinance. The decision to refinance should be carefully evaluated to avoid any complications at a later stage. By carefully studying the status of your current mortgage and comparing it to your income and other debts, we help you pick the refinance solution that best suits your current financial status.
We offer some of the lowest and most competitive mortgage refinance rates in the market. Regardless of your requirement, whether it is to consolidate existing mortgages or obtain a better rate, we get you the best deal possible. Our experienced mortgage professionals, who have extensive knowledge of the mortgage industry, will provide the necessary guidance that you need in making the right refinance decision.