Cove Real Estate

Posted by Cove Real Estate on 12/22/2017

Many Americans who purchased their home when they had lower credit, a shorter employment history, and less money stand to gain from refinancing their mortgages. However, most miss out on this opportunity or don’t realize it in time to save potentially thousands in interest payments.

According to recent data, 5.2 million Americans could save, on average, $215 per month if they refinanced their loan. But many homeowners are hesitant to refinance.

Whether it’s because of the inconvenience, the cost of refinancing, the worries about something going wrong, or uncertainty about whether they’ll actually save money if they go through the process, millions of homeowners are missing out.

So, in this article, we’re going to talk about some reasons it may be a good idea for you to refinance. If you’re one of the millions of Americans with a mortgage who are thinking about refinancing, this post is for you.

Riding the wave of the economy

Interest rates on home loans are historically low right now. As a result, homeowners can save by refinancing simply due to changing tides of the real estate market. Although mortgage rates have increased slightly over the past two years, they’re still on the low end, so this could be your last chance to save.

To consolidate your debt

Credit cards, auto loans, and other forms of debt can add up quickly. If you have a high-interest rate on your other debts, refinancing could be a good way to consolidate and save.

This can be achieved through a home equity loan or by refinancing with a cash-out option. This means you refinance your mortgage for more than you currently owe and take the remainder in cash to pay off your other debts with high-interest payments.

Typically, you need to have at least 20% equity (or have paid off 20% of your mortgage) to be eligible for this option.

Small percentages count for more now

It was once said that refinancing only made sense if you would receive a lower interest rate of at least 1-2%. However, with the prices of homes increasing over the years, sometimes even a small change, such as .75% is enough to save you substantial money on your repayment.

You’re able to repay early

One of the best ways to save on a home loan is by refinancing to a shorter term. Going from a 30-year loan to a 15-year loan can save you thousands. There are several calculators available for free online that will enable you to estimate how much you could save by refinancing to a 15-year mortgage.

You got a raise

One of the best times to refinance is when you can be certain that you can afford to pay off your loan sooner. As people progress in their career, it isn’t uncommon for them to refinance their loan so that they can spend more each month but save in the long run.

Since you have a higher income, and likely higher credit, you can also refinance a variable rate loan to lock in a lower fixed rate.

Posted by Cove Real Estate on 11/24/2017

A fixed-rate mortgage (FRM) offers one of many financing options for homebuyers. It enables homebuyers to lock in an interest rate on a home loan and pay a set amount each month for the life of a mortgage. As such, an FRM remains a popular option for homebuyers across the United States.

Ultimately, there are many benefits to choosing an FRM, including:

1. Easy Budgeting

With an FRM, your mortgage payments will always stay the same. Thus, after you get approved for an FRM, you can budget accordingly.

An FRM often serves as a great option for homeowners who struggle to maintain a budget. It ensures your mortgage payments will never rise or fall for the life of your loan, which may make it easier for you to map out a weekly, monthly or annual budget.

In addition, an FRM will stay intact regardless of market conditions. This means you won't have to worry about your mortgage costs rising even if interest rates increase nationally.

2. No Price Fluctuations

An FRM minimizes headaches for homebuyers, and for good reason. After you agree to FRM terms with your lender, you will know precisely what you'll be paying for your home.

Comparatively, an adjustable-rate mortgage (ARM) may be difficult for homebuyers to understand. This type of mortgage may fluctuate over time, which means the amount you pay in the first few years of your loan could escalate.

For example, a 5/1 ARM ensures that your interest rate will remain intact for the first five years of your loan. After the initial period, the interest rate may change annually. As a result, your monthly mortgage payments may fluctuate over the life of your loan.

3. Simple to Understand

Your lender will be able to outline the terms of an FRM with ease, as this type of mortgage ensures an interest rate is set in stone until your loan is paid in full. Plus, after you receive an FRM, you can focus on what's important – acquiring your dream home and enjoying this residence for years to come.

With an ARM, the interest rate for your loan may move up and down over the years. The factors that cause the interest rate to fluctuate are based on numerous market factors as well. Therefore, it can be tough to plan ahead for your monthly mortgage payments due to the fact that various factors may impact your loan's interest rate.

Determining whether an FRM is right for you can be challenging. Thankfully, banks and credit unions can define all of your home financing options and respond to any concerns and questions.

Furthermore, your real estate agent may be able to put you in touch with lenders in your area. This real estate professional also is happy to offer tips and recommendations to ensure you can get the financing you need to secure your dream house.

Examine all of your home financing options closely, and you should have no trouble obtaining a home loan that matches your budget.

Posted by Cove Real Estate on 4/14/2017


Two thirds of American homeowners are somewhere in the process of paying off a mortgage. It may seem like common sense that everyone should try to pay off their mortgage sooner rather than later. However, there are circumstances when it benefits a homeowner more to hold onto their mortgage longer.

In this article, we’ll offer some tips on paying off your mortgage, when you should refinance, and offer some tools that will help you along the long road to debt-free homeownership. If you’re a homeowner and find yourself asking these questions, read on.

I can afford to pay more each month on my mortgage, but should I?

In many cases, paying off your home as quickly as possible saves you money in the long run. A shorter loan term means less interest applied to your loan which could save you thousands of dollars in accrued interest.

What many people don’t think about is whether that money could be better spent elsewhere. If your mortgage interest rate isn’t too high, you might be better off allocating that extra income toward investments or retirement funds where they could earn you more in the long run.

This technique is typically most beneficial for younger homeowners. In your 20s and 30s you stand the most to gain from long-term investments, especially tax-benefitted retirement funds. Ultimately you’ll have to do the math, which is tricky because circumstances change; markets vary, our income goes up and down, etc. However, a good starting place is to determine whether you could earn more in retirement and investments than you could by paying off your mortgage sooner and therefore saving on interest. 

I’ve owned my home for a few years now, should I refinance?

Refinancing is a term that has become ubiquitous for homeowners. There are a few important things to understand about refinancing. First, lowering your monthly payments is not always ideal if it means you’ll end up paying more interest in the long run. Ideally, refinancing your mortgage will help you pay the least amount in total.

One way this can be accomplished is by refinancing to a 15-year fixed-rate mortgage which often darry slightly lower interest rates. This option is designed for people who have improved their credit and increased their income since signing their first mortgage.

Math isn’t my strong suit. How can I figure out my finances?

If all of the numbers and percentages associated with mortgages and refinancing seems overwhelming--you’re not alone. Fortunately, there are mortgage and refinancing calculators that will give you a good idea of where you stand if you decide to increase your payments or to attempt to refinance your loan. Here are some great tools:
  • Use this mortgage calculator for determining how much you would save by making extra payments.

  • This refinance calculator will help you understand the potential benefits of refinancing your mortgage.

  • To determine how much you could earn through investments (rather than paying more toward your mortgage) use this helpful tool.

  • You might be able to increase your savings by creating a better budget for yourself. This website will help you make a detailed budget and hold yourself accountable each month.

Tags: mortgage   home   refinancing   finance  
Categories: Uncategorized  

Posted by Cove Real Estate on 6/24/2016

Buying your first home can be confusing. Securing a mortgage is one of the most important parts of the home buying process. Making sure that you have the right loan and have chosen the right loan officer are among the things a first time buyer has to do to start the process. Here are some more tips on how to ensure a successful purchase: 1. Make sure your deposit is in order. Talk to your loan officer about what amount of a deposit is required for the purchase and type of loan. You will also want to make sure the funds are accounted for and readily available. You can expect deposits to run anywhere between 3 and 20 percent of the purchase price. 2. Plan to have a cash reserve in addition to your deposit. You may want to have a reserve of at least two months mortgage payments. 3. Ask your lender to go over all the fees that apply to the purchase. It is better to be prepared and know how much the actual purchase will cost. These costs are typically added into your loan but there may be some out of pocket expenses too. 4. Consider how much you can comfortably afford not how much you have been approved for. These numbers may vary considerably. Your mortgage costs should not be more than 30% of your household income. 5. The lowest rate is not always the best deal. You will want to look at not only the rate but also the terms and fees associated with the loan.      

Posted by Cove Real Estate on 9/25/2015

Are you looking to buy a bigger home? If you are looking to make the move a jumbo mortgage might be right for you. A jumbo mortgage is a home loan with an amount that exceeds conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO) or better known as Fannie Mae and Freddie Mac. Currently, the loan limit is $417,000 in most parts of the United States, but can increase to $625,500 in the higher cost areas. OFHEO sets the conforming loan limit size on an annual basis. Jumbo loans have slightly higher interest rates because they carry more credit risk.

Categories: Buying a Home