Tag: refinance

Brexit and US Mortgage Rates

The Effect of Brexit on Mortgage Rates in the United States

JS Realty Interest Rates brexitOn June 24, 2016, England voted to leave the European Union. This historic decision, referred to as “Brexit”, has caused a ripple effect here in the United States. It has driven interest rates down to their lowest mark in three years. Mortgage interest rates will fluctuate most directly due to the cost of mortgage backed securities. When mortgage bond prices go up, interest rate tend to fall and when mortgage bond prices drop, mortgage rates will rise. In addition to this correlation, the overall US economy will also influence mortgage rates.

GJS Realty Opposite directions brexitenerally speaking, when the economic indicators such as the stock market, inflation, and unemployment are positive, mortgage interest rates will rise. When the economic indicators suggest our economy is not prospering, rates will drop.

In December of last year, the Federal Reserve projected that it would raise interest rates up to four times in 2016. On June 15, 2016, Federal Reserve Chairperson, Janet Yellen decided NOT to raise rates. This was due to a very weak employment report in May.

Brexit has caused severe volatility in the global stock markets and has had a negative impact on the stock market here in the United States. No one knows what the long term impact of Brexit will be, but it is safe to say that the immediate impact of England’s decision to leave the European Union has directly led to lower interest rates.brexit

If you are considering buying a home, or if you currently have a mortgage and are considering a refinance, right now is a perfect time to get a mortgage loan evaluation from a licensed mortgage professional.

Not sure where to start? Click here to contact Senior Loan Officer Keith Harris or to get pre-qualified.

Keith Harris at Intercoastal Mortgage Company
NMLS ID # 838973
Company NMLS ID # 56323
(www.nmlsconsumeraccess.org)
Intercoastal Mortgage Company is an Equal Housing Lender.

MORTGAGE LOAN REFINANCE

Generally speaking, a loan refinance is a new loan to replace an old loan. Let’s look at the various reasons why a refinance would be appropriate.

JS Realty Business Man Text Save How

LOWER MONTHLY PAYMENTS – If your current interest rate high, refinancing at a lower rate can save you significant money each month. For example, if your loan amount was $300,000 and your rate is 5%, your monthly Principal and Interest (P&I) payment would be $1,633 per month. If you refinance the same $300,000 at a rate of 4%, your monthly P&I payment would be $1,432 or a savings of $201 per month. This equates to a savings of $2,412 per year and will save you $12,060 in five short years!

JS Realty Interest RatesLOWER INTEREST RATES – Interest rates can be lowered due to a change in the industry as a whole, such as the example above. Interest rates can also be lowered by shortening the term of the loan. 15 year rates will be lower than 30 years loans. Adjustable Rate Mortgages (ARM’s) are loans that are fixed for a specific time period such as 3, 5 7 or 10 years and will typically be offered at rates lower than a 30 year fixed loan.

SHORTEN LOAN TERM – A loan refinance can be considered as a way to reduce the length of your loan. Changing from a 30 year loan to a 15 year loan can greatly reduce the number of payments needed to pay off your loan. This is often used by borrower’s who have increased incomes since the beginning of their initial loan and can afford the higher monthly payments.JS Realty Loan Terms Paperwork

CHANGE FROM ‘ARM’ TO FIXED – Adjustable Rate Mortgages are fixed for a period of time and then they begin to adjust or change rates on an annual basis. Refinancing to a fixed rate term alleviates potential rate increases that can occur with the ARM’s.

COMBINE TWO LOANS INTO ONE – When purchasing a home, many borrowers obtain two loans to reduce the amount of down payment or to keep from paying mortgage insurance. As the value of the home increases, a single mortgage can replace both loans at a lower rate than the original two loans.JS Realty Refinance Application Form Pen

ELIMINATE MORTGAGE INSURANCE – Initial loans with a down payment of less than 20% will often have monthly mortgage insurance payments as part of the mortgage payment. Also, FHA loans include monthly mortgage insurance payments that you continue to pay for as long as you own the loan. As the loan balances decrease and property values increase, refinancing into a new loan with a loan-to-value of  at least 80% will eliminate the need for mortgage insurance payments.

CASH OUT –With enough equity in a property, refinancing is a great way to get cash that can be used for virtually any reason.
Some examples may be:JS Realty Refinance Monney Calculator Bills

-Home Renovations/Additions
-Auto purchase
-Boat purchase
-Medical bills
-College Education
-Pay off other debts that carry higher interest rates such as credit cards

If any of these scenarios seem to match your situation, please feel free to contact me to discuss how a mortgage loan refinance can benefit you.

JS Realty Keith Harris
Keith Harris
NMLS # 838973

Keith Harris
Senior Loan Officer
Intercoastal Mortgage Company
Direct: (703) 259-0788
Cell:    (703) 395-6601

 

 

 

 

JS Realty Free Analysis Contact Us

The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.

MORTGAGE RATE MARKET UPDATE

Recently I provided an overview of what makes mortgage interest rates fluctuate. Today, I want to provide an update of the mortgage industry in a general sense.

In the summer of 2013, the Fed announced that they would begin tapering the purchase of mortgage backed securities (MBS). The practice of buying MBS’s was intended to help keep mortgage rates low. That announcement caused a spike in JS Realty Interest Ratesinterest rates from the low 3% to over 4.5%.

At the beginning of 2014, rates on 30 year fixed rate conventional loans continued to remain in the high 3% to the low 4% range. At that time, you would be hard pressed to find anyone who thought rates at the beginning of 2015 would be as low as the year before. Well, that is exactly what happened! During the second full week of January, rates dropped to their lowest point in over a year with 30 year rates hitting the 3.625% mark. Rates have fluctuated between 3.625% and 4% for the past few months. As we begin the month of June, we have seen rates rise the first few days of the month.  But what does that mean for the future?

JS Realty increase mortgage rateNo one can tell for sure what rates will do, but everything I hear and read indicates that interest rates will rise gradually through 2015.  We may see rates approaching 4.5% or even higher by the end of the year.

From an historical perspective, rates are lower now than they have been for the last 10 years and are only slightly higher than the lowest point in 30 years, which was near the end of 2012 and the beginning of 2013. It is only reasonable to JS Realty Mortgage Loan Applicationbelieve that rates will gradually increase. It is also reasonable to assume that rates may rise to the 5% mark by the end of 2015 or the first half of 2016.

We have been very fortunate to have had such low rates for the past five years. It is a great time to purchase a home and it is a great time to consider refinancing if you haven’t done so since 2010. As the saying goes “There’s no time like the present.”

JS Realty Keith Harris
Keith Harris
NMLS # 838973

Every borrower has a unique need, as far as their loan is concerned. If you have any questions or would like more information, please contact our preferred Lender, Keith Harris at Intercoastal Mortgage Company.

 

 

The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.

CONVENTIONAL VS FHA LOANS

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA)

So why is an FHA loan a viable option to be considered?

Compared to conventional loans, an FHA loan offers some advantages for borrowers. Some of these advantages are due to recent changes in the rules for FHA loans, along with some changes in guidelines for conventional loans. Here are some things to consider when looking to purchase a primary residence or even if potentially refinancing a current FHA loan:

  • Allowable debt-to-income ratio: this is often higher on FHA loans than conventional loans
  • Waiting periods: If your credit has been impacted in recent years, FHA has the JS Realty Mortgage Loan Approvedfollowing waiting periods that are often much shorter than for conventional loans.

Bankruptcy (Chapter 13) = 1 year
Bankruptcy (Chapter 7) = 2 years
Foreclosure = 3 years [Conventional = 7 years]
Short Sale = 3 years [Conventional = 4 years]

  • Loan Limits: In the DC Metro Area, an FHA loan is limited to $625,500, with a 3.5% down payment. Conventional loans between $417,000 and $625,500 typically require a 10% down payment.

Recently, the FHA reduced the monthly mortgage insurance factors from 1.35% to .85%. This will mean lower monthly payments for purchases and provides current FHA loans to be refinanced with a lower mortgage insurance payment. For example, on a loan amount of $400,000, there is a monthly savings of $161 with the new monthly mortgage insurance payment. In addition, 100% of the down payment can come in the form of a gift from appropriate sources.

Every borrower has a unique need, as far as their loan is concerned. If you have any questions or would like more information, please contact our preferred Lender, Keith Harris at Intercoastal Mortgage Company.

JS Realty KHarris LenderKeith Harris
Senior Loan Officer
NMLS Registry # 838973
Office: 703.259.0788
Mobile: 703.395.6601
KeithH@icmtg.com

 

The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.