Refinancing Your Balance Faster

You refinance to a lower rate, and you get a lower payment. But the opportunities don’t stop there.

Reduce your balance faster. With a lower interest rate, you pay more principal with each payment, especially in the first years of the loan. Example: After five years of payments on a 30-year loan of $200,000 at 4%, you would pay $19,706 in principal vs. $17,105 on the same loan at 5%. That’s an extra $2,601 in benefit on top of the $7,052 of interest savings. Total advantage = $9,653

Own Free and Clear Sooner. There are two ways to make this happen:

• Pay extra principal. Apply your monthly savings toward principal to shorten your loan term by several years. Example: Using the same loan terms from above, pay your $118/month savings as extra toward principal and cut the loan from 30 to 24.33 years.
• Refinance for a shorter term. Rates on 15-year loans are typically lower than 30-year loans, so a payment on a shorter term may still be within a comfortable range for you.

Maximize Your Rate of Return Through Investments. If you deposit the $118 monthly savings from the example above into a tax deferred account earning 6% over time, it will grow to $81,852 in 25 years. If you use the savings to increase your 401K contribution with a 50% employer match, that figure would equal $122,782. Earning 6% on your money may be tough right now, yet historically, returns on a properly balanced and diversified portfolio are 7% or better. Always consult with a properly licensed financial advisor when making investment decisions.

Tap Into Your Equity. If you need to make repairs or improvements, you may be surprised at how much cash you might be able to free up without increasing your monthly payment. The same can be said for financing college educations or purchasing a second home or investment property.

Enjoy Peace of Mind. There’s comfort in making a prudent decision and putting a plan into action.

We’re here to review your options and help you decide what might be right for you.

How Much Can You Save By Consolidating?

Do you think the value of refinancing is gone?

Rates may be off the lows but can still be an amazing bargain compared to consumer and installment rates. Total interest, total term and cash flow savings can be significant with the right plan.

Consolidating multiple debts into one home loan is not for everyone. For instance, using your equity to have the equivalent of a 30-year car loan is rarely a great idea. But it may work if you have the discipline to take advantage of a low rate to speed up—rather than slow down—payment terms.

Consolidation can make debts disappear with less total interest expense than they would otherwise.

Want to explore what a good consolidation plan could mean for you? Reach out, and we’ll be happy to help!

Stop Before You Toss Blank Pages

Not sure why the banks do it, but it happens.

You may be tempted to throw away a numbered page on your statement if it is blank or contains an advertisement. Unfortunately, if the other pages are marked 5 of 8, 6 of 8, etc., the underwriter can’t be sure a missing page 8 of 8 had no important information.

To be sure there’s no delay in processing your loan application, please save and provide ALL numbered pages of your bank and other asset statements, even if they’re blank.

Thanks for your cooperation!