Posts Tagged ‘rental refinance’
Freddie Mac recently released the results of its Primary Mortgage Market Survey®, showing mortgage rates easing to new all-time record lows for all products covered in the survey helping to keep homebuyer affordability high. The average for the 30-year fixed mortgage rate has been below 4.00 percent for six consecutive weeks.
The survey concluded that the 30-year fixed-rate mortgage averaged 3.89 percent, with an average 0.7 point for the week ending January 12, 2012, down from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.
The 15-year FRM this week averaged 3.16 percent with an average 0.8 point, down from last week when it averaged 3.23 percent. A year ago at this time, the 15-year FRM averaged 4.08 percent.
Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.72 percent.
Results showed that the 1-year Treasury-indexed ARM averaged 2.76 percent this week with an average 0.6 point, down from last week when it averaged 2.80 percent. At this time last year, the 1-year ARM averaged 3.23 percent.
“Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market,” says Frank Nothaft, the vice president and chief economist of Freddie Mac. “Although the economy added 1.6 million jobs in 2011, which was the most since 2006, the unemployment rate remained historically elevated.”
For more information, visit www.freddiemac.com
As an owner of a mortgaged rental property, how do you know when it might be a financially beneficial time to refinance?
Know your goals
Before you set out to get refinancing information, decide what it is you’re looking to accomplish. Do you want have more cash available by making a lower monthly payment? Would you like to pay off your property faster? Do you want to use the equity in your property to make improvements (and raise rents) or earmark money for the purchase of another property?
Also, consider how long you plan to keep the property. If you’re planning to sell in three years, for instance, investing in a refinance effort — with its associated closing costs — might not be the most profitable move.
Questions to ask
You can make a better decision between many loan options once you’ve determined the most important aspects of refinancing for you.
As you make specific inquiries about loans, compare the details carefully. Determine the details of the rate and the term of the loan you’re interested in. The most important question is whether the interest rate, the length of the loan, or the combination of the two will lower your monthly payment or your pay-off amount, thanks to less accrued interest.
Be sure to assess whether the rate is fixed or variable. With a variable rate, what is the ceiling on the rate, if any? Read the terms and conditions of the loan carefully before you sign. A borrower can find himself in a bad situation with a low introductory rate that turns into a rate far beyond what was originally budgeted for.
You’ll also want to find out about closing costs. If there are some (and there usually are), can they be rolled into the refinance? And, if so, is your new monthly payment still low enough to make the deal worthwhile?
Consider the economy
Though there is no crystal ball to predict economic ups and downs, there are indicators that can help you make informed decisions. In a downturn, mortgage loans can be harder to get approved, potentially creating a higher demand for rental properties. If a refinance of an existing property would make it possible for you to make improvements to that property or buy additional rental properties to fill new demand, it might be the right choice for you.
Shop around
Though you can compare rates online through a variety of sites, consider having a professional do the footwork for you to offer advice on the many different kinds of loans available. It helps to have someone point out the pros and cons of individual loans and give insight on what might be the best match for your investment goals.
Refinancing can help make a rental property you’ve been considering selling viable again or give you the equity to buy an additional one. Shop carefully, read the fine print and you may soon have more money in your pocket even after paying the mortgage payment on your rental property.
Rentals.com
Site Search
Sign Up
Recent Comments