Home Loan Options to Consider
March 5, 2024
In the first week of March 2024, Business Insider noted that mortgage rates have floated near the 7% mark.
"Mortgage rates have been holding steady after rising last month” the article reports, “and they could stay near their current levels throughout March.”
Recently, 30-year fixed-rate mortgages have been in the mid-to-high 6% range and while those numbers are expected to drop “sometime” in 2024, some borrowers can’t afford to wait and hope.
They need housing now. What are these house hunters to do to manage their costs on a more expensive mortgage?
Buy With a Plan to Refinance
Some borrowers anticipate wanting to refinance later, and some don’t. But going forward it may be wise not to skip thinking about a refinance loan when the rates are still elevated. Plan, budget, and save with this in mind.
Those who decide to include refinance planning in the early stages of the purchase loan won’t regret it even if they change their minds later and choose not to refinance after all. Why is this step so important?
Refinancing Requires Planning, Too
When you refinance your home it will be necessary to plan the transaction in a similar fashion to a purchase loan. What does this mean?
You are applying for a major line of credit (again) when refinancing.
You must ensure you have 12 months of on-time payments on all financial obligations, you need to save up for closing costs, and you’ll want to work on lowering your debt ratios.
All this takes time. You should consider the amount of time it takes to plan and save for the purchase loan and factor that amount of time into the refinance loan.
You see where this is going. To be approved for a major line of credit, you need financial discipline and if you go into a purchase loan knowing you need to have that discipline again it will affect your spending and saving habits in the interim.
Some borrowers delay the purchase of a new car or other big spending for after closing day has come and gone. Borrowers who know they face another credit check and another loan application process may not be so quick to dive into more debt or big purchases.
Knowing you will need to work on your credit and finances another time to refinance the loan to a better interest rate when the time comes might be half the battle for some applicants.
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RELATED VIDEOS:
Reverse Mortgages Are Ideal for Senior Borrowers
The Pros and Cons of Subprime Mortgages
A Good Faith Estimate Provides Mortgage Information
"Mortgage rates have been holding steady after rising last month” the article reports, “and they could stay near their current levels throughout March.”
Recently, 30-year fixed-rate mortgages have been in the mid-to-high 6% range and while those numbers are expected to drop “sometime” in 2024, some borrowers can’t afford to wait and hope.
They need housing now. What are these house hunters to do to manage their costs on a more expensive mortgage?
Buy With a Plan to Refinance
Some borrowers anticipate wanting to refinance later, and some don’t. But going forward it may be wise not to skip thinking about a refinance loan when the rates are still elevated. Plan, budget, and save with this in mind.
Those who decide to include refinance planning in the early stages of the purchase loan won’t regret it even if they change their minds later and choose not to refinance after all. Why is this step so important?
Refinancing Requires Planning, Too
When you refinance your home it will be necessary to plan the transaction in a similar fashion to a purchase loan. What does this mean?
You are applying for a major line of credit (again) when refinancing.
You must ensure you have 12 months of on-time payments on all financial obligations, you need to save up for closing costs, and you’ll want to work on lowering your debt ratios.
All this takes time. You should consider the amount of time it takes to plan and save for the purchase loan and factor that amount of time into the refinance loan.
You see where this is going. To be approved for a major line of credit, you need financial discipline and if you go into a purchase loan knowing you need to have that discipline again it will affect your spending and saving habits in the interim.
Some borrowers delay the purchase of a new car or other big spending for after closing day has come and gone. Borrowers who know they face another credit check and another loan application process may not be so quick to dive into more debt or big purchases.
Knowing you will need to work on your credit and finances another time to refinance the loan to a better interest rate when the time comes might be half the battle for some applicants.
------------------------------
RELATED VIDEOS:
Reverse Mortgages Are Ideal for Senior Borrowers
The Pros and Cons of Subprime Mortgages
A Good Faith Estimate Provides Mortgage Information
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