Making the decision to refinance, is it right for you?

With interest rates rising above historical lows, I'm getting this question very often, "does it still make sense to refinance?" Helping consumers determine if it makes sense to refinance is what I do. It's a pretty individualized process and depends on things like: how long you plan to stay in your home, what your current interest rate is, how much is your home now worth? Navigating the questions and finding the answers with you is what I do.

When you purchased your home, in all likelihood, some of your costs were covered by the seller. When you refinance your home, all of the costs are covered by you. So in a nutshell, you want to make sure that the cost of refinancing your home will produce a benefit. Even a so-called "no cost" loan has costs, the cost to you the borrower, is typically a higher interest rate. The easiest way to determine if there's a benefit to you is to divide the costs of the loan by the monthly savings to determine the length of time it will take to payback your costs in your savings. So if your "payback timeframe" is 36 months and you want to stay in your home until Johnny graduates from high school in 5 years, this would make sense for you. But if your "payback timeframe" is 36 months and you're pregnant and think you might outgrow your house soon, maybe not.

Another way to look at whether the benefit of a refinance is greater than the cost is to compare an amortization schedule of your current loan and remaining time frame, balance and interest rate to an amortization schedule of the proposed loan. There are a bunch of different tools out there. Here's a link to one that I've used before.

In any case, I would love to help you navigate the decision making process.

The chart below, brought to you by the Legacy Lending Group, debunks the truths and myths about refinancing:

Another reason for renters to consider buying a home

This article from the Mortgage Daily News titled "Disparity in 'Severe Housing Costs' between Renters and Owners" is a bit chilling, but it's just another reason for hardworking individuals who currently rent to consider buying a home. In a nutshell, "the Center for Housing Policy today released a report on housing affordability among working households in the US. The report concludes an ongoing uptrend in the incidence of “severe housing costs” among 'working renters' whereas 'working owners' actually saw a decrease from 2010 to 2011."

Bottom line, between the years 2008 and 2011 working renters faced an increase in housing costs of 5.9% and a decrease in income of 3.2% while working homeowners saw a decrease in housing costs of 3.2% and a decrease in income of 4.2%. Thanks to the refinance boom homeowners have been able to decrease their housing costs. But this leaves renters at a huge disadvantage faced with an increasing housing cost burden, a trend that seems to be continuing with housing prices on the rise.

Today, we are STILL experiencing historically low interest rates. The housing market seems to have truly bottomed out and at least in this valley we are seeing housing prices move up. So renters, give your local mortgage professional a call and see if there's an opportunity for you to move into your new home!

Often, when someone calls me to get prequalified, it's a matter of putting together a plan that will get them to their goal. Sometimes we are ready and sometimes we need to work out credit issues or save a little more; whatever the case may be, it's worth checking it out.

I look forward to vising with you!

Susanne
208-761-9775
www.idahorealestateloans.com

New Grean Leaf Cleaners is amazing!!!!

I was pretty enthusiastic when I got a $10 off coupon in the mail from Green Leaf Cleaners. Not only are they offering greener methods for dry cleaning; they are right around the corner from my house. So I brought a few things in. When I came to pick up my order my mouth dropped open. I didn't even recognize my wool coat. I honestly don't think it's EVER been that clean before!!! I was totally amazed.

I just had to do a quick RAVE about this new local business that is providing a chemical free option to typical dry cleaning methods AND they are fast and efficient!

Check out their website at http://www.greenleafdrycleaner.com/greenearth-cleaning.

Should I buy, or should I rent?

Twenty plus years ago when we bought our first home, we were just so excited to own our own home! We scraped the bottom of the barrell and squeezed by the qualifying game as a newlywed couple. Woo hoo!!!! We did it! But then the real estate market came to a halt and houses weren't moving up much in value and we looked around and realized the neighbors were renting houses like ours for $300 LESS than what we were paying in our mortgage. At the time I thought, big OOPS, we probably should have researched rents first before we took this plunge.

As you well know, housing values have taken a beating the past few years and now we are in an uptrend, yeah! We have a unique situation here, values appear to be sustaining growth while interest rates are still hovering at historical lows. While I can tell you it's a great time to buy, it's more important that you know it for yourself.

So my advice if you're contemplating purchasing a home is to do what I didn't do twenty years ago. Do some research!

Here's what you need to know:
What's your current rent?
What's the value of your current place?

Or if you don't like where you're at, find out how much what you need costs to rent and what it costs to buy.

There's a handy little rent vs buy calculator on the New York Times website. Go there. Plug your information in, you will need to make some assumptions about your interest rate and your property taxes. I would go with 1% on your property taxes, that's somewhat typically around here. This tool will give you a fairly in depth analysis of whethere it makes sense to buy or continue renting. Have fun checking it out and be sure to call me if you have any questions!

Susanne Schlador
Mortgage Loan Specialist NMLS 929383
susanne@capitalmortgageboise.com

208-854-7806

What would you do with $370 per month?

$370 per month is the average savings of my refinance customers in the past six months (average loan amount is $264,387). I was actually sort of surprised by the savings when I started collecting the data. That's really a lot of money to put in your pocket every month. The biggest winner had a savings of $672 on a loan amount of $243,800, that's just huge! Even the smallest loan at $112,000 saved big at $374 per month!

What would you do with $370 each month? That's a lot dinners out, lift tickets, movie nights, etc or you could start saving for the next vacation. But a really great idea is to improve your financial situation by investing, saving, or if you have short term debt, get rid of it. We were able to increase our 401K contributions last year after our refinance.

If you haven't refinanced lately, you should talk to your mortgage specialist (or me). The savings for my customers occurred across the board among all the loan programs: FHA, Conventional, HARP, VA, etc. Also, there are always new programs emerging. If I can't help you today, I keep track of your needs and call you back when I can. So it's worth a ten minute conversation to see if a refinance is right for you.

Figuring out if it makes sense for you is really up to you. But I like to walk my customers through a process of figuring out if it makes sense. A big factor that you should consider in making the decision is how long you plan to stay in your home. One of the simplest ways to consider whether a loan makes sense is to divide the cost of the loan by the monthly savings to determine your "payback". Let's say your loan is going to cost $5,000 and you're going to save $250 per month. Dividing $5,000 by $250 gives you 20 months. That means it will take 20 months in your new loan to "pay back" the cost of the loan. If you're thinking about moving next year, this doesn't really make sense. You would be better off staying in your current loan, you would actually lose money if you sold your house in a year. But if Johnny is a Freshmen in high school and you want him to graduate before you make any changes, then by all means this makes sense, because 20 months into this loan you will start saving.

Most borrowers don't want to dig much deeper than the above. But for the interested borrowers, I love to dig deeper into the numbers and look at amortization schedules to make comparative analysis of current vs prospective loan.

Feel free to call me for your free mortgage consultation.

Susanne Schlador, NMLS 929383
Capital Mortgage, LLC, NMLS 382735
208-761-9775 or 208-854-7806
susanne@capitalmortgageboise.com

Open a new door!

Open a new door! That's my motto. Last year I opened a new door when I launched into a new career as a Mortgage Loan Officer with Capital Mortgage, LLC. Yes, I am brand new to the lending industry! It's been an adventure of discovery and stretching my brain as I've ventured into this highly regulated and competitive industry. But being new doesn't necessarily mean inexperienced; yes, I am continuing to learn new things everyday as all good loan officers do. But the reality is, I bring a fresh approach to the world of shopping for home loans as I engage with prospective borrowers to discover their needs and match them with the lender that can meet that need. Then I walk the borrower every step of the way, through what at times, can be a laborious process. I equate the process to giving birth. You are completely exposed; but in the end you are happy when you've opened the door of your new home!

The experience I draw on is personal and professional. On a personal level I have been a consumer of home loans for over twenty years; having experienced homeownership with three different homes and refinancing multiple times, I strive to give borrowers the exceptional service, understanding, and diligence that I expected as a consumer. And I do expect my customers to shop around, because that's what smart people do! And I hope that they will engage me in their shopping process so I can help illuminate the numbers.

Professionally, I draw on experience that includes my early post-college days in Market Research. Having graduated from California Polytechnic State University with a B.S. in Business Administration with a concentration in Marketing; I have always been fascinated by consumer behavior.  I've also spent some time working in insurance sales, banking, volunteer recruitment, team building, and launching my own business and product line. In between jobs, I've managed to raise a family of three children with my husband of now 22 years! But with two kiddos off to college this year it was time to find a higher paying career.

Long story short, I look forward to opening new doors with all who pass by. Whether you are looking for a new home loan or refinancing the one you're in, I will walk you through the process.