There are a lot of mortgage companies out there.  While using a mortgage company to help you find the best rate makes sense, it’s important to select the right company.  Here are a few tips for selecting a good mortgage company for your needs:

  1. Be careful of special promotions that have hidden fees. Many of the deals you may see on television or in the papers may try to win your business with an extremely low rate, but once you factor in all the hidden costs, you’re not saving at all!
  2. Be sure you know each fee up front and what it is for. As touched on in point #1, some companies may tack on additional costs that are not disclosed right away. A good company will make all of this information readily available to you.
  3. Be aware of application and appraisal fees. Some mortgage companies charge huge amounts for these but don’t really offer anything to justify the cost. Track down the best service at the lowest cost.
  4. Service is the most important factor when considering a Pensacola Mortgage Company. Unfortunately there are some companies that are committed more to their bottom line than they are to their customers.  You should choose a mortgage company that will take the time to get to know you and your needs, and formulate a plan that works for you!

We will do whatever it takes to become your Pensacola Mortgage Company. Let us answer your questions and win your trust by calling us at 850-936-0422 today!

Contact Pensacola Mortgage today!

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When should you decide to refinance your mortgage?  That depends on a number of factors.  Right now may, or may not be the best time in history to make this decision, but predicting this move perfect would require a bit of psychic ability on your part.  Many experts recommend that if you find a good deal that saves you a significant amount of money, it’s probably worth taking the deal rather than waiting to beat it.

The three major factors are simple:

  • How much will you reduce your interest rate?
  • How much will you pay in closing costs?
  • How long do you plan on keeping the house?

The old rule was that you should refinance if you could get a rate two points lower than your current rate. Now, mortgage experts say to look into it if you can reduce your rate by even half a point. Many people decide that one full point is reason enough to look into your Pensacola mortgage refinance options.  The longer you plan to keep the house, the smaller the reduction that will benefit you because you’ll have enough time to regain your closing costs.

If you are considering refinancing, we’d be happy to provide any assistance or advice you might need.  Just give us a call at 850-936-0422 today so we can explore your options.

Contact Pensacola Mortgage today!

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The best time to refinance a mortgage is determined by a confluence of a two key factors: bettering your mortgage terms, and lowering the cost to borrow. It’s that simple. If you are not bettering your mortgage terms for you and you are not lowering the cost of borrowing when you look at the whole picture, you should not refinance.

Bettering Your Mortgage Terms

There are several ways to get better mortgage terms for you. So part of the decision to refinance a mortgage depends on what it is that you want to refinance to accomplish. Here are some typical ways people better the terms of their mortgage:

  • Eliminating PMI. Private mortgage insurance goes away once you owe less than 80% of the value on your home. If you can show that the value of your home is greater than what you owe putting you under the 80% mark when you refinance you save the PMI which is a monthly cost that can be significant. Typically when all costs are considered home owners pay about 12% to have private mortgage insurance rather than pay off that amount of the loan.
  • Shortening the payoff period. The payoff period is usually part of the label you were quoted for your mortgage. The most common are the 30 year and the 15 year mortgage. The fewer years you have your mortgage the cheaper it is for you in interest. The reason is a 15 year mortgage is usually a lower interest rate, and more importantly, you pay the interest for a shorter time. Even if your payment goes up, you are saving money over the long haul.
  • Lowering your monthly payment. This does not always mean the mortgage is a better deal for you. You could lengthen the term of your mortgage and get a lower payment, but it will cost you more in the long run. However, if you can keep the term of your mortgage the same, and still lower payments then the terms are better for you. Or, if you simply can no longer afford to make the payments then even if it costs you more in the long haul on the mortgage, it will save you big time on your credit score and eliminate loss of equity through foreclosure.

Lowering the Cost of Borrowing

  • Lowering the percentage rate. The most basic reason to refinance is the market has lowered the rate you can get on your loan by at least a percentage point. If the APR (annual percentage rate) of your new loan is lower than the lending rate on the old, you should refinance. The APR takes into account the closing costs of the mortgage as part of the interest rate. Don’t compare APR to APR since you already paid the closing costs on the current mortgage, you can’t save any money on that.
  • Preventing foreclosure. The costs of foreclosure are difficult to quantify for each person. However, if there was any equity in the home you lose all of those years of payments into that equity. Further, your FICO score will plummet making it hard not only to buy a new home, but even to rent a good one in many locations. Many landlords now require a credit screening and will not rent to people who have recently defaulted on financial obligations. This doesn’t take into account the costs of personal dignity, respect, and reputation in a community.
  • Leveraging debt. In rare occasions, holding onto a mortgage saves the person more than paying it off. If there are investment vehicles that consistently pay a higher percentage than the APR on the mortgage then it is worth considering refinancing your home to get equity out and reinvesting in solid, low risk investment vehicles that leverage the debt in the home.

Dave Ward is a real estate investor, professor, and freelance writer. As the author of When to Refinance Rule of Thumb he believes consideration of a few key factors can help any homeowner make an informed decision on the best times to refinance their home.

Contact Southpoint Financial today!

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