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When It Pays To Refinance Your Mortgage — Literally

Why Refinance

To refinance a mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Each has its considerations.

Lower Your Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. There is no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, Boulder homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low- or no-closing costs options for refinancing. Be sure to ask about it.

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Tips To Close Your Home Loan Faster, With Fewer Hassles

Close faster on your mortgageWith mortgage rates at all-time lows, purchase and refinance activity is climbing.

Home sales are at their highest levels since May 2010 as home buyers take advantage of favorable economic conditions. Home prices are low, household income is rising, and rents are up in many U.S. cities.

Low rates have stoked mortgage refinance applications throughout Colorado , too.

Last week, with 30-year fixed rate mortgage rates slipping to 3.36% nationwide, on average, more U.S. homeowners were in search of a refinance than during any one-week period since April 2009.

With loan volume high, banks are nearing their respective capacities for underwriting and approving home loans. As a mortgage applicant, therefore, you’ll want to make sure that you’re taking whatever steps necessary to ensure that your home loan closes on-time, and without hassle.

You most important responsibility? Be responsive to your lender.

When asked for paperwork and/or supporting documentation, providing a 24-hour turnaround can keep your loan “top of mind” with your underwriter. This is important because underwriters are people and, sometimes, people “forget”. The fewer times that an underwriter has to “relearn” your file and its nuances, the better your chances for a speedy approval.

A secondary benefit to being responsive to your lender is that you’ll be less likely to miss your rate lock deadline which, too often, is a costly proposition for a borrower. Even if the mortgage market has improved since your original lock date, your lender may assess rate-lock extension fees equal to up to one-half percent of your loan size.

Other tips to ensure an on-time closing include :

  1. Disclose everything upfront. Your lender will find out anyway, so don’t under-disclose important facts.
  2. Be accessible. Your lender will often want to contact you by phone or email. Don’t lose days playing “phone tag”.
  3. When required, schedule your appraisal for as soon as possible. It’s easy to lose days to this part of the process.

And, lastly, don’t challenge an underwriter’s request for “more paperwork”. Lenders want to see as little paper as possible. They don’t ask for information that’s not required to approve your loan.

Mortgage volume is expected to remain high through the end of 2012 and into 2013. Follow these steps to help close your loan on time, and with few headaches. 

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Boulder Fire Details

taken by Sam Hall

taken by Sam Hall

With this latest fire, over 1,800 Boulder Colorado residents were asked to evacuate their homes yesterday and the breaking news for today is that the evacuation was lifted.  And according to the Daily Camera, mandatory evacuation orders remained in place overnight for at least 139 Boulder County residents and 1,700 people within city limits west of Seventh Street, from Canyon Boulevard on the south, to North Street on the north. Also, Boulder Community Hospital’s Maxwell and Mapleton facilities were also evacuated and will remain closed Saturday. The hospital’s north Broadway location was not affected.  Read about how the fire started and more. Read the rest of this entry »

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Shrink Your Home Loan: Obama’s Foreclosure Prevention Plan

Housing EconomyThe following is a true story.

  I have a family member who bought her home in 2005.  The economy was better then and real estate was hot in Boulder Colorado.  Prices were high, inventory was low, and banks were more lenient with loan qualifications.  She makes over $50,000 and has a steady job.  However, she just had a baby and would like to buy a bigger home.  As expected, she got her home ready to list and had the home appraised first in order to determine a price. 

What do you guess happened?  Click here to find out.

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Examples Of Short Sale Financial Hardship Letters

helpYes, we can help! Short sales are increasingly common as new government acts have passed to find alternatives to foreclosures.  You are not alone.  The economy is tough in Boulder Colorado and elsewhere;  people are losing jobs and it’s been a difficult time in real estate as property values have dropped below mortgages owed on homes.  This makes it difficult to refinance and when it’s hard to pay on that mortgage, you find yourself in a dire situation.  Often times if you qualify, a short sale is a better solution that foreclosing.  It’s not as hurtful to your credit and the bank is willing to accept a payment lower that the borrowed amount in order to avoid foreclosure costs.  The Troia Team has written many blogs on the topic so if you feel you are a candidate for a short sale, let us know.  We can help.   Because we have covered the positives to a short sale and explained the process in detail, I wanted to use this blog to provide examples of short sale hardship letters.  These are necessary to submit to a lender when simultaneously submitting the other necessary documents that go along with a short sale request to the bank.  Click here for hardship letter examples.

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Yes! It’s Another Short Sale Blog.



But worth your while, I guarantee you.  The Troia Team from Boulder Colorado is writing so much on the subject lately because IT IS the subject lately.  Real estate short sales are everywhere and the numerous listings are partially due to the Home Affordable Foreclosure Alternatives Program; go ahead, call it HAFA. 

The information is non-ending.  You can’t write enough about short sales.  As we discussed before, having a knowledgeable Realtor is most important.  One who can walk you through the process.  If I were going through a short sale, here’s what I would want to know from my real estate agent.



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First Time Homebuyer Tax Credit Paid In Advance

giveparentmoneyIf you’re not taking advantage of the first time homebuyer tax credit – you should be!  Lower interest rates, high inventory and low sale prices are continuing to make this a buyers real estate market.  Not only are we seeing great deals in home sales, but first timers are getting that tax credit we are all hearing about.  Buy before December 1st and receive $8,000 at tax time.  Luke Mullins from US News explains that the federal first-time homebuyer tax credit was created by Congress this summer to encourage new homebuyers to purchase homes and thereby stimulate housing markets. However, the federal tax credit has been largely ineffective. One of the primary reasons the federal credit hasn’t worked is that the homebuyer doesn’t receive the money until he receives his federal income tax refund – which may be several months after the home is purchased.  Read more.

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Steps In The Homebuying Process

I have been showing homes in Boulder Colorado to first time homebuyers.  They are doing what a lot of us dream about our whole lives.  Buying a home, getting married, and “settling down”.   After home shopping over the weekend, they have decided that planning for their wedding (in a different state, I might add) is easier than the process of buying their first real estate.  I’m not sure about the complexities of planning a wedding, but it’s my job to make homebuying a comfortable process that they will look back on for the rest of their lives.  After showing them homes for several days, they are getting closer to making a decision.  When we do submit an offer, I will uncomplicate their lives and educate them on the homebuying process.  Which is quite easy if explained correctly and a by giving them a checklist, they can refer to it anytime while their property is under contract.  Read more to learn the easy steps of homebuying. Read the rest of this entry »

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Why You Shouldn’t Hire A Real Estate Agent!

 Just last week I received a call from a buyer who wanted to see one of our listings.  From our phone conversation alone, I could tell she had something against real estate agents.  Maybe she is always trite and condescending to everyone, but I didn’t think so. I had a feeling it was just directed at me. I took a long deep breath as I drove from our office in Boulder Colorado down to Denver where the bank owned property is located.   I tried not to make assumptions, entering into the situation with an open mind.  Of course, I brought other comps in the neighborhood that fit her criteria.  Several times I tried to turn this lead and win her over with my charm.  Of course she found me impeccably charming, but it unfortunately came down to this one response, “We don’t use real estate agents, we buy our own houses”!  This led me ponder all the reasons why you should NOT use a real estate agent.  Read more.

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Freddie and Fannie who? What the crisis means for you !

Flag and moneyCan you tell it’s an election year?  Gas prices are coming down finally and the credit crisis is being shaken up big time!  My mom always said, “sometimes it takes  a crisis to solve a crisis”, and that most people need to be hit in the head with a 2 x 4 to get their attention first!.  Yes indeed!  Can you imagine the headache Fannie Mae and Freddie Mac have right now?  Read the rest of this entry »

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