The Accunet Mortgage Show (11/08/2020) Episode

In this episode of the Accunet Mortgage and Realty Show Brian and David Wickert discuss another record low mortgage rate on 30-year fixed mortgages, asking the question “Do we really want the government in the mortgage business?”

This week’s highlights:

  • What you need to know about “For Sale by Owner” home sales
  • How do you know if rates are low enough to refinance?
  • Three ways you can benefit from refinancing your mortgage

For sale by owners: What you need to know.

Platforms like Zillow have made “For Sale by Owner” home sales easier than ever, but there are certain steps that you have to go through, that many people are just not aware of that the real estate agent takes care of:

  1. Take professional Photos
  2. Get an attorney to draft the contract
  3. In Wisconsin, if your the seller,  you need to provide a owner’s title insurance policy

Did you know Accunet is affiliated with a fabulous title company?
Lakefront title is right next door to our office, in Waukesha, WI. Their For sale by owner package provides the title policy and includes the 60-year history of that property’s title to identify any liens and encumbrances that need to be taken care of.

Rates are low, but are they low enough to refinance?

With another record low rate announced this week by Freddie Mac, homeowners are asking the question “how do I know if rates are low enough to refinance?”

The answer really depends on two key factors:

Factor 1: Loan Size

The number one factor you should consider before you refinance is the loan size, or the loan amount. For example, if you’re looking at a $50,000 loan balance, you’ll need to drop your rate by two full percentage points, even at a rate 2.78%, to even get close to saving $1,000 a year.

Now, on the other hand, if you’ve got a $400,000 mortgage, a refi rate of just half-a-percent less than your current rate, would save you close to $2,000 a year.

So the size of the loan matters, a lot.

Factor 2: Closing Costs

The second factor that you should consider before you refinance are the closing costs. You have to understand what am I really paying to get this mortgage? And this is where consumers are routinely confused. It’s easy to equate the amount of money they’re bringing to the closing table with how much it will cost them out of pocket, but that’s not the right way to think about it.

Let’s look at what you’re really paying for in order to get the benefits a lower interest rate:

  • Appraisal
  • Credit Report
  • Title
  • lender fees
  • Points
    • Example: the Freddie Mac average rate comes with seven tenths of a point, which is around $1,400 extra on a $200,000 loan.

Unsure if it’s the best time for you to refinance your home?
Contact a home refinance expert.

Three ways you can benefit from refinancing your mortgage

  1. Get maximum payment relief with lower monthly payments
    • Take the 30 year fixed rate option at a lower rate and watch your monthly payment go down. Not only that, you might be able to get rid of PMI as well, because property values have gone up so much!
  2. Pay your mortgage off faster
    • Refinance with a shorter term and you’ll pay off your mortgage faster!
  3. Take cash out!
Worried about refinancing your home? You aren’t alone! Click here to learn about the top 5 reasons homeowners are afraid to refinance.