Reasons to Refinance in 2019

Reasons to Refinance in 2019

This year brings good news for homeowners with the current mortgage market presenting a window of opportunity for refinancing due to continued favorable mortgage interest rates, increased home values, and tax law changes effective 2018* due to the Tax Cuts and Jobs Act (TCJA).

For many homeowners, refinancing today offers the opportunity to reduce the rate on your mortgage in order to reduce monthly mortgage payments, save money, meet certain financial goals, and more

Here are a few reasons to consider refinancing in 2019:

  1. Lower your interest rate: If it’s been a while since your last mortgage check-up, there’s a chance you could be paying a higher interest rate than today’s rates. By lowering your interest rate, you’ll save money on your monthly mortgage payments that frees up cash to help meet other financial goals or live more comfortably financially month to month.
  2. Shorten the life of your loan and save money: Refinancing to shorten a 30-year vs 15-year term can save you money. With this extra cash, you may be able to retire earlier if the loan is paid off earlier, travel, or even build up investment portfolio.
  3. Drop the PMI: With the current increase in many home values, a refinance could help you drop PMI (premium mortgage insurance) to help lower your monthly payment amounts.
  4. Pay down debt: Use the extra monthly cash saved by lowering your mortgage payment to help pay down debt, or even do a cash-out refinance to pay off credit card debt, car loans, personal loans, school loans, etc.
  5. Make necessary home renovations: If you love your home and plan to be there for a while, you may want to consider a cash-out refinance loan to get the money you need to make the home renovations you’ve always dreamed of.

Inlanta Mortgage offers different types of refinance loans to meet our customers’ needs for each unique financial situation. If you’re wondering if refinancing is right for you, contact your local Inlanta Mortgage loan expert to get started.

 

2018 New interest rate deductibility limits! *

Mortgage interest deduction. You generally can deduct interest on mortgage debt incurred to purchase, build or improve your principal residence and a second residence. Points paid related to your principal residence also may be deductible.

For 2018–2025, the TCJA reduces the mortgage debt limit from $1 million to $750,000 for debt incurred after Dec. 15, 2017, with some limited exceptions.

Home equity debt interest deduction. Before the TCJA, interest was deductible on up to $100,000 of home equity debt used for any purpose, such as to pay off credit cards (for which interest isn’t deductible). The TCJA effectively limits the home equity interest deduction for 2018–2025 to debt that would qualify for the home mortgage interest deduction.

*2018-19 Tax Planning Guide by Sikich LLP, CPA

 

 

 

Refinancing Traps

shutterstock_112335221Refinancing Traps

Refinancing can be tricky, but a little preparation before starting the process goes a long way in avoiding mishaps along the way. Here are some common traps that many run into while refinancing their homes and ways you can avoid falling into the same traps.

 

The automatic payment trap

Did you know it can take up to two weeks to have automatic payments canceled? If your payments are made this way, be sure to turn it off before closing. You don’t want to pay for the same month twice!

The missed or late payment trap

Believe it or not, lots of people think they don’t have to keep making payments once they apply to refinance. Missing a payment could damage your credit and even preclude closing. Just be careful regarding your very last payment, as it should be made in time to assure it’s credited toward your payoff balance.

The tax escrow trap

The funds in any existing escrow account will typically be held until after the current loan is paid off. Since this money will not be available at closing, you need to be able to establish a new escrow account and/or pay any upcoming taxes from savings or the new loan proceeds.

The insufficient funds trap

The tax escrow trap can contribute to this, and so, too, can many other factors. For example, a low appraised value could limit your loan amount. As many loans are set up to cover all closing and escrow funds, it’s important to know that any necessary or unexpected adjustment could change the cash to close requirements accordingly.

 

We want you to be aware of these potential pitfalls before they have a chance to occur. Of course, we will work with you and on your behalf to prevent and avoid them.

 

Looking to start the refinance process? Find your local Inlanta loan officer here. Already going through the refinancing process? Reach out to your Inlanta representative whenever you have questions, and we’ll be happy to help.

 

Inlanta Mortgage, Inc. NMLS #1016.

 

Am I eligible for the the Home Affordable Refinance Program a.k.a. HARP?

Everyone seems to be asking this question lately. Last month, the Federal Home Finance Agency or FHFA announced HARP 2.0…and we patiently awaited more details on this variation of the ‘Making Home Affordable’ program designed to help those overwhelmed with underwater mortgages. On November 15th, Fannie Mae and Freddie Mac confirmed the program details. Here is a brief overview of the program eligibility requirements:

  • Your loan must be backed by Freddie Mac or Fannie Mae. Don’t know? Use these links to find out:
  • Fannie Mae Loan Lookup
  • Freddie Mac Loan Lookup
  • Your mortgage loan must have been originated prior to June 1, 2009
  • You must be current on your mortgage loan (no late payments in last 6 months)
  • Your current loan-to-value (LTV) must exceed 80%.
  • Your HARP refinances are limited to your area’s conforming limits.
  • Conforming limits may vary from location to location but in most cases are $417,000.
  • Cash out refinances are not available with HARP – only rate and term finances are allowable.
  • Mortgage rates for HARP are similar to traditional refinancing and will be determined by your lender.
  • Homeowners may only utilize the HARP program once per home – if you have already refinanced under this program you are ineligible

This program is not designed to help homeowners avoid foreclosure, it is strictly designed to assist homeowners who have watched their home values deteriorate during the recent housing crisis. Although it may be a bit before we accept an application through the HARP program as we are still adapting our systems to accommodate the program details – Inlanta Mortgage currently offers the DU Refi Plus and Open Access programs to assist homeowners with underwater mortgages.

For more information on the Home Affordable Refinance Program contact a licensed Inlanta Mortgage loan consultant. Find a mortgage loan consultant near you.

Inlanta Mortgage operates in fourteen states including Wisconsin, Illinois*, Iowa, Michigan, Indiana, Minnesota**, Florida, Massachusetts, Arizona, Kentucky, Kansas, Missouri, Colorado and North Dakota. Based out of Brookfield, Wisconsin Inlanta Mortgage has been in business since 1993 and offers a variety of loan programs in addition to refinances including FHA, USDA, FHA 203K, Reverse Mortgages, Conventional and Purchase Loans, and VA Mortgages. For more details on mortgage loan programs available through Inlanta Mortgage click here.

*An Illinois Residential Mortgage Licensee #MB.0006190, Inlanta Mortgage is regulated by the State of Illinois Department of Financial and Professional Regulation, Division of Banking located at 122 S Michigan Ave, Suite 1900, Chicago IL 60603. Phone #312-793-1409.

**Minnesota License – Inlanta Mortgage, Inc. # MO 20373610 “Not an offer to enter into an interest rate lock-in agreement under Minnesota law.”

Inlanta Mortgage NMLS #1016