What You Should Know About Refinancing Home Loan Rates

When taking on the refinancing of your home loan, in order to reduce your rates, it’s important to review the marketplace and speak with experts about the latest options. Our team at Summit Mortgage Corporation has many years of experience guiding clients on mortgage refinancing and in this new post, we’ll explain what you need to know about refinancing a home loan.

Your debt-to-income ratio

Your debt-to-income ratio should be a leading consideration when refinancing home loan rates. The data shows that overall debt-to-income levels should be less than 45%, so you might wish to pay off some of your debt before beginning the refinancing process. Your lender will have strategies to consolidate or eliminate debt using your home equity and in many cases you can pay off debt through refinancing your mortgage loan.

The costs of refinancing

The cost of refinancing a home loan can be anywhere between 3-5% of the home loan total. But there may be ways in which you can reduce this total cost or include it in the mortgage payments you’re already making. Some lenders offer no-cost refinancing, but this may lead to you paying a slightly higher interest rate to cover your costs. Costs can be offset and recouped by savings gained through refinancing and rarely do borrowers pay out of pocket for mortgage costs.

The rates vs. the term

The term of the mortgage should be a leading consideration when establishing mortgage value. To reduce your monthly costs, you’ll want to have the lowest interest rate and the longest term possible. Make sure that both the term and the interest rates match your goals so that your financial position remains strong.

The PMI

When homeowners have less than 20% equity in their home, they pay private mortgage insurance (PMI) to safeguard the financial investment of the lender. If you’re refinancing your home loan at new rates, you may find that your home has lost value and you now have less than 20% equity in the property, requiring you to pay PMI. Be sure you discuss potential PMI costs with your lender as you consider refinance options.

Our trusted and experienced team at the Mortgages Diversified Team at Summit Mortgage Corporation can help guide you in saving money on your home loan refinancing process. To discover more about this topic, call us today.

 

Discover the Latest Mortgage Advice from Our Diversified Lenders

When you’re in the process of applying for a mortgage, you must work with your lender and find ways to enhance your credit to achieve the ideal mortgage loan. Our team of Mortgages Diversified at Summit Mortgage Corporation has decades of experience in the industry. In this new post, our diversified lenders will help you improve your chances of getting the optimal mortgage by highlighting steps for improving your credit.

Establish a payment plan for loans

Make sure that you have a clear payment plan for your current credit obligations. This means resolving credit card debt and establishing credit limits that allow you to safeguard your savings for the coming months. Take a look at how you are paying your current credit cards and determine areas in which you can make significant savings. The card with the highest interest rate should be your priority when establishing a payment plan. The less debt you have going into the mortgage lending process, the better.

Maintaining credit through the lending process

Once you have been approved for a loan, or have a refinance in process, it is important to not use your credit cards or credit accounts. You don’t need to close your cards, just do not use them until your loan is closed. You don’t want an increase in credit usage when working with a lender. Applying for new credit can negatively affect your credit, which you want to avoid during this process. Wait until your loan is closed and funded before using credit to buy furnishings or make upgrades to your home.

Review your credit reports

In establishing your options as a borrower, the diversified lenders will review your credit report to determine if you have any late payments or outstanding debts. If you have any debts that have gone to a collection service, this will show up on your credit report. Make sure that these debts are paid before visiting a lender to look for a loan. If you review your credit report and find inaccurate information within the report, you can dispute it with the three main credit bureaus and eliminate the inaccuracy from the system.

Working with a trusted and experienced diversified mortgage lender in the application stage can help you find a property that meets your family’s needs. To learn more about the steps you can take today to begin improving your credit, call us directly.

 

A Guide to the Average Mortgage Rates Across Minnesota

By educating yourself on the interest rates in the national marketplace you can hone your strategy for refinancing your mortgage. Our team at Mortgages Diversified at Summit Mortgage Corporation is highly experienced in the mortgage marketplace and within our new post, we’ll provide a guide to understanding the average mortgage rates across Minnesota.

15-year fixed mortgage

Mortgage rates can change daily, so you need to be prepared for fluctuations that happen quickly in order to lock in on the mortgage rate you are looking for.  Fifteen-year mortgages tend to be a lower rate than longer-term mortgages, but will come with a higher monthly payment because you have less time to pay –off your investment.  The benefit is that you would be spending less on interest, which reduces the total cost of your property.

30-year fixed mortgage

All mortgage timeframes have fluctuations in the interest rates and need to be researched and monitored when you are interested in purchasing or refinancing a home.  With a thirty-year mortgage you would be spreading the cost of your investment over a longer period, thus it may make the most sense for your budget due to lower monthly payments.

What you need to know about mortgage rates

  • You’ll pay less per month with a 30-year mortgage

It’s important to note that, generally, you’ll pay less per month with a longer mortgage such as 30-year mortgage than you would with a shorter option.   But for the term of the loan, due to the interest paid, it is more expensive than a shorter term loan.

  • The principal is paid slowly in the beginning

At the beginning of your mortgage contract, the principal is paid off slowly and most of the payments will go toward interest. You can use an amortization calculator to find out how the numbers break down when evaluating your mortgage options.

  • Fixed rate mortgages are preferred when interest rates rise

In the current market environment, it’s thought that interest rates will continue to rise into 2019 and so those negotiating with the lender for a refinance now may consider a fixed rate mortgage their best option. That’s because the fixed rate will never rise and will allow the homeowner to save on their interest in the coming years.

  • Variable rate an option when selling in near future

However, a variable rate mortgage is often the preferred choice of homeowners looking to sell in the next few years. Variable rate mortgages allow for more of the principal to be paid down over a shorter time, ensuring a greater return when selling the home.

Our Mortgages Diversified Team at Summit Mortgage Corporation can help you capitalize on the latest low mortgage rates in Minnesota. To learn more about your options, call today.

 

Tips for Refinancing a Mortgage Loan

Refinancing a mortgage loan requires you to take into consideration your current financial situation and the marketplace to determine the best way to save on your loan. Our team at Summit Mortgage Corporation has decades of experience helping clients with refinancing their mortgage loan products, and in this post, we’ll explore our tips for the refinancing process.

Take on the process soon

Rates are expected to rise steadily over 2019. So, it’s important that you’re proactive and speak with a lender about refinancing your mortgage loan in the coming months.

Have your documents ready

You should be prepared in case market rates drop quickly over the coming months. Have your financial documents in order and be ready to speak with your local lender about the various loan options in the marketplace.

Tap into your home’s equity

One great option for many homeowners is to tap into their home’s equity with a cash-out refinance. This will provide you with more money for upgrading the home and increasing its value.

Work on your credit score

Take the time now to work on your credit score to prepare for the refinancing process. Your credit score will be one of the leading influences on how much interest you pay on your mortgage loan, and so it’s the ideal time to begin lowering your debts and building your income. Speak to your local lender about ways in which you can build your credit.

Refinance to an ARM

An Adjustable Rate Mortgage could be the ideal way in which to refinance for the years ahead. An ARM often comes with a lower initial interest rate which grows over time, and so if you’re considering selling in the near future, refinancing to an ARM can help you save on interest in the meantime.

Refinance to a short-term mortgage

Another option is to refinance to a short-term mortgage, which will allow you to save money on interest over the years ahead. The payment differences between a 30-year mortgage and a 10-year mortgage, are significant and opting for the shorter-term option can help you avoid overpaying on interest.

Our team at Summit Mortgage Corporation can help guide you in the right direction during the refinancing process. To begin, call us today.

Post-Crisis Tips for Refinancing a Mortgage Loan

Within the post-financial crisis era, banking laws have become more tightly regulated. Lenders are now controlling how they allocate their loans and consumers must follow a specific process to achieve a loan they can afford. When refinancing a mortgage loan, it’s important to follow these new processes and to ensure the loan is affordable and suits your financial objectives for the near future. Our team at the Mortgages Diversified Team at Summit Mortgage Corporation, has decades of experience in the lending marketplace, and in this latest post, we’re highlighting our post-crisis tips for refinancing a mortgage loan.

The cause for the crisis

Before looking into how to ensure you achieve the best possible rate for the refinancing of your mortgage loan, let’s highlight three of the causes behind the financial crisis in the lending market:

  • Few documentation requirements

Homebuyers were able to purchase homes with limited income verification and almost no background checks.

  • Buyers with poor credit had market access

The subprime mortgage market allowed buyers with low credit to access the marketplace easily.

  • Interest-only mortgages supported low initial down payments

The interest-only mortgage product allowed buyers to enter the marketplace with a low investment. The interest-only period expired after a few years, causing a meltdown within the financial marketplace.

The tips for refinancing your mortgage loan

With new regulations in place to protect the financial marketplace, here are our tips for refinancing a mortgage loan:

  • Note: pre-approval instructions don’t make sense in the context of a refinance. Keep debt under control

Don’t take out any other loans when you’re in the process of refinancing a mortgage loan. Keep your loans under control and ensure you have the income to cover the expenditure.

  • Discuss savings plans

Make sure that you have a significant amount of savings before the refinancing process. Keeping savings topped up can protect you against unforeseen changes in the marketplace.

Our experienced team at Summit Mortgage Corporation can help safeguard your finances by offering guidance on the loan refinancing process. To learn more, call our team today.

What You Need to Know About Minnesota Mortgage Rates and Loan Approval

When reviewing your loan options on the Minnesota mortgage marketplace, it’s important to learn about interest rates and credit ratings, and the role these elements have within the loan process. Our Mortgage team at Summit Mortgage Corporation has decades of experience in the lending industry and in this latest post, we’re highlighting what you need to know about Minnesota mortgage rates and loan approval methods.

Credit rating considerations

When reviewing your loan application, lenders will first consider your credit rating and how you use your money. However, unlike within the car loan process, the credit rating is only part of the loan approval. Lenders will also review your debt-to-income ratio, your job stability and the size of your down payment when considering your application.

Credit scores

  • Your credit rating is assigned a score within the lender’s system, and the following scores dictate your potential application success
  • 740 or higher are the best credit scores, with access to the best Minnesota mortgage rates
  • 619 or less, may result in your application being denied

As you can see, there’s not a great difference between successful and failing scores when it comes to credit ratings. So, if you have a low score, you shouldn’t be too downcast. There are steps you can take to improve your score and get approved for a loan in a consolidated timeframe.

Steps to improve your success

Now that we know a little more about how the lender determines your credit score, let’s review a few of the steps you can take to enhance your potential success within your loan application:

  • Reduce debt

Lenders are less likely to approve a loan if you have high debt levels already. Reduce some of your consumer debt before entering the loan application process.

  • Improve your job status

Make sure you take any opportunity to enhance your working status.

  • Consider outside down payment sources

If you can improve your level of down payment, you might be able to enhance your success levels within the loan process. A high down payment will catch the eye of lenders as it limits their risk.

Our experienced team at the Mortgages Diversified Team at Summit Mortgage Corporation can help to guide you in your loan application process. To learn more, call us today.

 

Tips for Refinancing a Mortgage Loan

When you’re going into the process of refinancing a mortgage loan, it’s critical that you work with lenders to learn more about the refinancing process and to choose options that suit your financial needs over the years ahead. The Mortgages Diversified Team at Corporation has great experience in this area of the marketplace and in this latest post, we’re highlighting our tips for refinancing a mortgage loan.

Speak to a lender in the coming months

The data shows that rates are set to rise significantly in the years ahead. It’s important that you make sure to speak with a lender in the coming months to protect yourself against potential higher rates in the future.

Secure your credit score

Now is the ideal time to get your credit under control. Make sure that you reduce your debts, particularly unsecured credit card debt. You should also work to build up your savings to show that you’re the ideal applicant for a new mortgage loan.

Select a short-term option

One of the best ways in which to reduce your mortgage costs is to adjust your mortgage into a shorter-term contract. The interest rates are generally lower for short-term mortgages and you’ll save money over the full loan term..

 Consider paying buy-down points, you can choose to pay points on your mortgage to reduce your interest rate. You could save on interest over your full loan term if you pay a lump sum now. Make sure you work with your lender to review the financial options carefully.

Consider a cash-out refinance

It could be the ideal time to tap into your home’s value with property values rising rapidly. Make sure you speak with your lender about a cash-out refinance option. The lender can guide you through the benefits of this process and ensure you make the right decision for your current finances.

Our team at Summit Mortgage Corporation has significant experience in helping clients through the refinancing of their mortgage loan. To learn more about your refinancing options, call us today.

 

A Guide to the Limits and Rates for a Minnesota Mortgage Loan This Years

When taking on the financing process for a mortgage loan, it’s critical that you know the limits in place across the state. Our team at the Mortgages Diversifiedteam at Summit Mortgage Corporation has great experience in helping clients save on their mortgage rates in Minnesota, and within this latest post, we’re presenting a guide to the marketplace for this year.

One Family Loan Limits

The vast majority of clients entering the marketplace this year will be those looking for a loan for a one-family home. The current limit for a conventional mortgage loan on a one-family home is $453,100. This limit is in place to ensure that families can maintain their mortgage for the years ahead and to protect the integrity of the financial marketplace.

Two Family Loan Limits

If you’re investing in a property that is designed to host two families or more it’s important that you know the loan limits in place. The current conventional loan limit for a two-family home is $580,150. Make sure that your investment is below the limit to avoid paying additional interest for the loan.

Government Loan Limits

Government loan options such as FHA, VA or USDA may have different loan limits, sometimes based on the county where the property is located. Contact our team for details to find the right option for you.

Jumbo Loans

If the loan that you are using to purchase your property doesn’t comfort to these limits, then you may face yourself having to acquire a jumbo loan. One of the leading challenges associated with jumbo loans is that they may require more documentation for the lender to approve the loan. You may also find that you’ll be paying higher mortgage rates for your jumbo loan in Minnesota. And so it’s important that you work with a respected specialist such as the Mortgages Diversified Team at Summit Mortgage Corporation, in going through the loan application process.

Our team at Summit Mortgage Corporation can guide you each step of the way in getting your loan approved and in reviewing the documentation required for your home loan. We can help you to understand the current marketplace and ensure you consolidate your costs while achieving the ideal loan for your financial position. To discover more about our work in the industry and our services, call us today.

The Costs and Benefits of Refinancing a Mortgage Loan

If you’re in the process of refinancing a mortgage loan or considering the option, you might first review the costs and the benefits of the refinancing process. By reviewing this information, you can ensure you make the right choice for your financial future. Our team at Summit Mortgage Corporation has significant experience in the lending field, and in this latest post, we’ll highlight the costs and the benefits of refinancing a mortgage loan.

The benefits of refinancing

First, let’s consider some of the benefits of refinancing your mortgage loan.

Reduce your rate

In some cases, homeowners find that the rate they are paying is outside their budget and leading them into debt. You can refinance your mortgage loan to a lower rate to reduce your costs.

Changing the terms

In refinancing their mortgage, homeowners can also change the term lengths for the mortgage. Going from a longer-term mortgage to a short-term mortgage you can reduce your rate, as lenders don’t have to calculate inflation into the process. However, your monthly payments might be higher as a result because you’re paying the same amount over a shorter period.

Cashing out equity

In refinancing your mortgage, you may also be able to cash out your existing home equity. This is ideal for those who have other expenses that require liquid assets for the coming months, such as a business opportunity.

The costs of refinancing

Now we’ll review the negatives some face in the refinancing process:

Penalties

Some lenders have penalties for refinancing a mortgage loan before the term is completed.

Potential for higher cost

If you refinance to a variable rate mortgage and the economic environment changes, you could be spending more money for a higher rate.

Longer terms

In some cases, when you refinance you’ll have to pay for the mortgage over a longer period of time. So, you should consider your future and whether you wish to be paying off your mortgage over the coming years.

The Mortgages Diversified Team at Summit Mortgage Corporation here to guide you refinancing your mortgage loan. To discover more about the process, call us today.

Our Lenders Explain What You Need to Know About Jumbo Mortgage Loans

Before speaking with local lenders about jumbo mortgage loans, it’s important that you learn more about the topic and of the unique value in getting a jumbo loan on a local property. Our team at Summit Mortgage Corporation has significant experience in the marketplace and in our latest post, we’ll explain what you need to know about jumbo mortgage loans.

What is a jumbo loan?

First comes the most important question: what is a jumbo loan? A jumbo loan is a home loan that exceeds the conforming loan limits under Fannie Mae and Freddie Mac. They are sometimes called “non-conforming loans” within the industry. You can find out whether you require a jumbo loan by checking the current loan limits in your county.

How do I qualify for a jumbo loan?

Qualifying for a jumbo loan is a little more difficult than qualifying for a conventional loan and you may be required to provide more documentation than you would if your loan remained within the conventional loan limits. You may need the following to qualify:

A high credit scores

Most jumbo mortgage lenders will require a credit score higher than 720 in order for you to qualify for a jumbo loan.

A low debt to income ratio

If you are applying for a jumbo loan, you should have the means to pay it off. And so you should have a low debt to income ratio, around 45%.

Cash reserves

In applying for jumbo mortgage loans with lenders, you may need to show that you have the cash on hand to pay for a year of mortgage payments.

Further documentation

In addition to the previously highlighted information, you may also be asked to prove your tax status, as well as provide bank statements showing your income and your current level of cash on hand.

By meeting the standards required and providing the necessary documentation you can be approved for your jumbo mortgage loan. Our team at Mortgages Diversified can help with this process. To learn more, call today!