Denver Real Estate Blog

Not only have rates been volatile, but it’s not as easy for borrowers to qualify for low rates as it used to be. Three weeks ago, rates for a 30-year, fixed-rate mortgage bottomed out at 5.175 percent. On Thursday briefly touching 6.25 percent.

It’s not just about getting a low rate anymore. You have to qualify, and that’s not as easy given the fluctuating housing market. Lenders are tightening their underwriting as world economies are being rocked by the mess left by the subprime debacle; housing prices are losing ground; and foreclosures are going through the roof.
Now, even if their credit scores are high enough, if the house is over encumbered - that is, the loan is worth more than the real estate - they’re likely to be rejected by the lender.For many people, refinancing to a lower rate would be one way to save money - and maybe their homes - as adjustable rate mortgages are rising to 7.5 percent or higher.

Rates have been on a roller-coaster ride recently, and it is likely it will take at least 12 to 18 months for the housing market to get back on its feet. Keep in mind rates change every day. So how do you know when it is time to refinance?

Refinancing tips

* Get pre-qualified first. If you don’t, you’re wasting your time and the time of your loan officer.

* One rule of thumb is that the new rate must be at least a point lower than what you are currently paying. So if you’re paying 7.5 percent, make sure you get a rate of 6.5 percent or lower.

* Make sure you know all of the costs associated with refinancing. That can include appraisals, title searches and documentation fees. If it costs you $3,000 and you save $300 a month, it will take you 10 months to recoup your costs.

* Most lenders suggest that you get the lowest rate possible without paying any points. A point equals 1 percent of the loan amount.

* Be cognizant that there are two factors at work - time and money. You might save money each month, but if you have paid five years off on a 30-year loan, and you start over again, your savings could be an illusion because of added payments over the life of the loan. On the other hand, your game plan may be to sell the house long before the loan is paid off. As an alternative, you could ask the lender if he can amortize the new loan over 25 years instead of 30 years.

Mortgage Resource

Dawn-Renee Mack has been a Colorado mortgage professional for nearly a decade. She received formal education at Bradley University in Illinois. Today she leads an experienced lending team, which includes not only 30 years of combined mortgage experience but vast accounting experience as well, Mack firmly believes with each loan she originates for clients, to treat your family’s home mortgage as if it were her own. She looks at every situation with an eye for what is best in the present and what will also help you accomplish your long term financial goals.

Dawn-Renee’s lending team firmly believes that client education is vital to a homeowner’s financial success. Through education and excellent service, she elevates what is often perceived as a frustrating and confusing process to a smooth, seamless home-buying experience. “I think the most important aspect of my job besides the planning of my clients’ mortgage future is to make sure they are educated about the process itself. Familiarity with what to expect allows a homeowner to relax, and that is my ultimate goal. Buying a house should be a positive experience!” Focusing solely on mortgages for her entire financial career has allowed Dawn-Renee to become an expert in her field. She knows the ins and outs of widely divergent programs, ensuring that all of her clients get the best possible loan, regardless of their specific situation.

Dawn-Renee Mack has access to over 350 investors and thousands of loan programs is invaluable to my philosophy that I will find the loan that fits my client, not force my client into a loan box that is not in their best interest.”, says Mack. If you have any questions regarding the current mortgage market. Feel you could benefit from an evaluation of your current mortgage loan and or any loan program someone else has proposed and want to make sure it’s really something you should be involved in you can reach her directly at 303-691-5058.