Posts Tagged ‘refinance home improvement mortgage’

Home equity reaches all time high

October 8, 2019

The amount of equity in US homes now exceeds the levels seen before the housing crash. Available equity in the US is just over $6 trillion, which is 25% higher than the peaks seen during the housing boom.

Black Knight Inc uses data and analytics to provide forecasts for the mortgage and real estate industries. Their surveys indicate just over half of home owners have rates at 0.750% or higher than current rates. The average home owner has $140,000 in equity in their homes.

Meaning… homeowners have enough equity to avoid PMI (or get rid of PMI if currently on their loan) and lower their monthly payment by moving to a better interest rate.

With rates at yearly lows, and lots of equity in homes, it is the right environment for a refinance. So… should you refinance?

The main question I ask clients is “how much longer do you plan to remain in the home?”

  • If the homeowner is looking to move in the near future, then it rarely makes sense to refinance.
  • If the monthly savings begins to exceed $100 per month and a break-even point is around 2-3 years, then a refinances begins to make more sense.

Another question I get is “when should I consider refinancing?” It is a great question, and my answer is simple… if the current interest rate is 0.500% or higher than your rate, then at least have a conversation.

Own a home in Georgia and your interest rate is at or over 4.500%? Wondering if now is a good time to refinance? Contact me today. In just a few minutes, we’ll put together some numbers to see if a refinance could make sense. A credit pull isn’t required for this conversation.

Mortgage rates are as low as they’ve been in a couple of years. There is more equity than ever in US homes. If you are planning on remaining in your home for 2+ years, now may be a great time for a refinance.

Interest rates move lower

June 18, 2019

Interest rates/Mortgage rates (same thing) moved to a two year low earlier in the month. While rates have since rose a bit, they are much lower than the start of the year.

Rates are well over a half point better since the start of the year. This decrease is beneficial for two reasons. First, it is helpful for those out looking to buy a home right now. Let’s say someone was looking to get a loan for $250,000. With the improvement in rates, a buyer can now get a loan for $265,000 and have the same payment. More buying power!

The other is for existing home owners. The Chief Economist at Freddie Mac said with rates dipping below 4%, “there are over $2 trillion of outstanding residential loans eligible to be refinanced – meaning the majority of what was originated in 2018 is now eligible”

So… should I refinance? A couple of questions you can ask yourself:

  1. Did I purchase a home in 2018? If yes, then rates are definitely lower than when you bought. It would be worth looking into what a new payment could be with a lower rate.
  2. Are current 30 year fixed rates of at/below 4% better than a half a point or more than your current rate? If yes, then it is worth looking at the numbers.
  3. Considering taking some equity out for a home project? I am working with several clients doing a cash out refinance. With the drop in rates, these clients are getting a lower rate, cash out for home maintenance, and keeping a similar payment to what they are making now.

Do you fit into any of those questions? If yes, it might be time to review the numbers for a potential refinance. If you are a homeowner in the state of Georgia, contact me today! In a short phone call, we can decide if the time is right for a refinance. If rates aren’t low enough for it to make sense, we can set a target rate and I’ll contact you when rates move lower. It is that easy. If nothing else, it is worth inquiring to make sure you don’t miss out on this drop in mortgage rates!

Fannie Mae HomeStyle Renovation Mortgage

March 8, 2011

I know, I know, I know… a LOT of posts sounding eerily similar these days. First it was the Fannie Mae HomePath Mortgage for foreclosures. Then I discussed the Fannie Mae HomePath Renovation Mortgage (also for foreclosures). I even referenced the FHA 203K Streamline mortgage post I wrote in 2009.

Today, the rehab discussion moves to the Fannie Mae HomeStyle Renovation Mortgage. Think of the HomeStyle as being a cousin to the HomePath because they do share features:

  • all renovations must be completed by a state licensed contractor
  • structural repairs/additions can be made to a home
  • luxury items such as swimming pools, hot-tubs, fences, etc. are allowed
  • all renovations can be purely cosmetic (new paint, carpet, tile, appliances, etc.)
  • a 10% contingency reserve is required
  • program for primary residences and investment properties

They share features, but there are some really important differences:

  • there is a $5,000 minimum renovation requirement
  • the maximum renovation amount is 50% of the “after completion value”. If the value is $500,000, then up to $250K can be put into renovations. An amount of up to $100K can be put into a home completion value at $200,000
  • can be used to purchase a property or refinance one already owned
  • minimum down payments are increased (compared to HomePath) to 5% for a primary residence and 25% for an investment property
  • 620+ credit score required (a larger down payment may be required for scores under 680)

Using the HomeStyle program, buyers/home owners can make dramatic changes to a home. The program is ideal for individuals looking to add on another story, make a significant addition, or completely gut the inside of a home.

As with all loan programs, to get started, one must be prequalified. If the property is in the state of Georgia, I’d love to start the mortgage process with you. All you need to do is contact me. I can answer questions about the HomeStyle proram (or any of the rehab programs mentioned in this post), and we can get the prequalification process started!