INTRODUCTION:
Interest rates are in the cellar. Trying to buy a new home is impossible unless you want to pay a premium. This might be a good time to refinance your home. It might also be a great time to see if you can find a trust or conservatorship property that is maybe in need of repair or perhaps has just the right number of bedrooms, but it needs an extra bathroom to make it your just-right Goldilocks home. If your cousin Fred has experience with home additions and he has two brothers who are licensed electricians and plumbers, you can get a great interest rate on a loan (with a good credit rating, of course), add that bathroom, and save a ton of money. For that reason, it’s a good idea to keep an eye on the inventory of trust and conservatorship homes right now and, well, all the time. You never know when a great deal will pop into the marketplace.
In the meantime, we will be giving you five good reasons to refinance now, three good reasons to wait, and two good people (us)to have on your team as you approach the real estate market in these post-pandemic, unsettled times
Five good reasons to refinance
1.Interest rates are at a historic low. Refinancing at a lower rate will result in an overall l lower amount of interest charges paid through the life of the loan.
2.Because home values are high, you will have a better Loan-To-Value ratio and may qualify for a better rate or a higher loan amount.
3.If you can lower your monthly payments and help pay off some other, higher interest loans (like your car loan), refinancing is a good idea.
4.If you want to pay off your home sooner, going from a 30- to a 15-year mortgage at a lower interest rate might fit nicely into your budget and let you own your home outright sooner.
5.If you have an adjustable-rate loan, you might want to snag a fixed-rate loan at the current low rates.
Three good reasons NOT to refinance
1.You’re not sure if or how long you are going to be staying in your current home.
2.Your credit score is not so hot. (Click HERE for the U.S. Government website to find out about credit reports and scores.)
a.Your mortgage interest rate will be higher than if you wait until your credit score stabilizes.
b.Your credit rating will be further lowered JUST BECAUSE you’re looking for a loan.
3.The hassle factors! You’ll be pulling documents for the lender, finding tax returns, insurance policies, loan documents, and personal information from all corners of your home office and your spouse’s file cabinets, and asking your legal and financial advisors’ frazzled secretaries.
In our opinion, refinancing is worth it.
Example Loan Comparison (Does not include PMI, insurance, taxes. Interest rates vary daily and by lender.)
| Calculation Results |
Existing $1M, 30-year fixed loan at 5%* |
Refinance $1M, 30-year fixed loan at 2.875% (July 18, 2021 |
| Monthly Payments | $5,384 | $4,149 |
| Total Payments over 30 yrs. | $1,932,556 | $1,493,614 |
| Total Interest Paid | $932,556 | $493,614 |
•This interest rate is arbitrary. Use any of the loan calculators to put in your own figures.
The difference in this example is almost half a million dollars and well worth the hassle.
HERE’S AN IDEA (!!!): IF YOU REFINANCE, YOU COULD TAKE MONEY OUT OF YOUR HOME AND CONSIDER BUYING A PROBATE HOME OR PIECE OF COMMERCIAL PROPERTY RIGHT NOW TO START BUILDING YOUR REAL ESTATE EMPIRE! JUST A THOUGHT. ☺ We can help. ☺
The CREM group deals in both residential and commercial trust, probate, and conservatorship properties. We know that our clients and prospects would like to know if interest rates will go up in the future, stay the same, or go down! SO DO WE!
The current rates are the lowest in recent history. In general, we recommend refinancing your home. As Marth Stewart says, “It’s a good thing.” * * *
As long-time real estate agents for all kinds of properties in Los Angeles and Orange Counties, we have made sure we support our clients so they know the legal aspects of selling their probate, trust, and conservatorship homes in California. We also try to ensure that our readers are aware of many trends in real estate.
As always, contact us by email here if you have any questions about real estate, probate real estate, conservatorship, or trust real estate properties, especially in Los Angeles and Orange Counties in California.
Or directly:
Mark Cianciulli, Esq. mark@cremgroupre.com Daniel Taylor, Esq. daniel@cremgroupre.com
DISCLAIMER: This content is meant purely for educational purposes. It contains only general information about real estate and legal matters. It is NOT legal advice and should not be treated as such. We recommend consulting a legal or tax professional before acting on any material, opinion, or point of view described herein.
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