Refinance Mortgage – Problem or a Solution?

Is it a good idea to refinance your mortgage in Denver? There is no one answer to this question. Refinancing can save you a lot of money—but it can also cost you money depending on your situation. 

Why do some homeowners choose to refinance their mortgage?

• To get lower interest rates
• To shorten their mortgage term
• To switch from ARM (adjustable-rate mortgage) to a fixed-rate mortgage (or the other way around)
• To use some of their home equity to cover a financial emergency, consolidate debt, or fund a large purchase 

Refinancing costs anywhere from 2% and 5% of the principal. Just like the original mortgage, it requires an appraisal and involves application fees. This is why it's important to do the math to see whether refinancing makes sense financially in your case. 

One of the best reasons to refinance your mortgage is to get a mortgage with lower interest rates—lower by at least 2%, ideally, though some experts say that even 1% is good enough of an incentive. So when interest rates drop, think about refinancing so you can shorten your mortgage term and pay a lot less in interest. 

Switching from a fixed-rate to an adjustable-rate (or vice versa) may make sense financially, too, depending on two factors: the rates and how long you plan on living in your current house.  

You can also refinance your mortgage in Denver to tap your equity or consolidate debt but beware. This can backfire and worsen your debt problems. It will take quite a few years to recover the refinancing costs, so don't do this unless you are sure that you are staying in your home for the foreseeable future. 

It's best to seek advice from a mortgage advisor to figure out if it makes sense to refinance your mortgage.

Could a Reverse Mortgage be theSolution for Your Financial Problems?

Reverse mortgages have been widely criticized because they are not the ideal financial move for everyone. But this doesn't mean that a reverse mortgage in Denver is a bad deal in every situation. Even though it can be an expensive option, it might still be the best choice, depending on your circumstances.

Do you need cash and your biggest asset is your home equity? If you are in this situation and don't have any other way to raise funds for your daily living expenses, then a reverse mortgage is worth looking into. 

However, this decision should never be taken lightly. After all, you worked hard for so many years to accumulate your equity—and you will spend a lot of that on interest and loan fees once you sign up for a reverse mortgage. So how do you decide? Here's how to know if a reverse mortgage in Denver can be the solution to your financial woes:

1. To even qualify, you must own your house outright or at least be close to paying it off.

 

2. You AND your spouse should ideally be at least 62 years old. Any younger and a reverse mortgage isn't ideal.

 

3. A reverse mortgage only makes sense if you have enough equity in your home so that the loan will provide you with a good line of credit or lump sum monthly payment after paying off the existing balance on your mortgage.

 

4. You should be planning on staying in your home for many more years. It doesn't make financial sense to pay all the upfront costs associated with a reverse mortgage in Denver if you move in just a few years. Also, you will have to repay the mortgage if you decide to move.

 

5. You also need to be updated on your property taxes, home maintenance, and homeowner's insurance if you have a reverse mortgage. The lender can declare the loan due and payable if you fall behind.
   

If you think that a reverse mortgage in Denver is the right solution for you, then talk to a mortgage broker who can help you get competitive quotes from different lenders. Mortgage brokers can also provide some counseling to help you figure out if this type of loan is a good long-term financial strategy for your situation.

3 Financial Tips Every First Time Home Buyers Should Know

A house is a major life purchase for most people. Unfortunately, it’s also often an emotional decision with some first-time home buyers. The result? The home that’s supposed to give them security ends up being a major source of financial struggle, ultimately hurting their financial goals and forcing them to pay mortgage well into their retirement years. 

Don’t make the same mistake. As a financial guru once said, you should own your house—not let it own you. Here are some financial tips to keep in mind before buying a property. They are suitable for first time home buyers in Denver and those who have gone down that road before. 

1. Have an emergency savings fund.

It’s a good idea to have on hand some savings worth six months of your living expenses in a liquid emergency fund. This ensures that you can cover most of what life throws at you—such as a car problem or a dental surgery—while still being able to afford your monthly mortgage.  

 2. Pay of all your debts.

Have a balance on your credit card? You might want to pay it off before you even start looking at homes for sale in Colorado. Being debt-free will put you in a position of much less stress as you make your mortgage payments because you no longer have to worry about other monthly costs such as your auto loan, credit card debt, or student loan.

3. Figure out how much you can comfortably afford. 

This is extremely important. A lender might say you are entitled to a bigger loan, but you don’t necessarily have to borrow that much. Buy less than you can afford if you want financial peace throughout your life. When a huge mortgage does not burden you, you can use your income to build wealth and enjoy life.

Homes are costly—one of the most expensive things most people buy in their lifetimes. Homeownership costs don’t stop at the purchase price. It also includes homeowner’s insurance, taxes, HOA fees, and maintenance costs—from repairing leaky roofs to cleaning the HVAC system. All these expenses make owning a house more expensive than renting. You have to be financially ready to reap the benefits of homeownership as a wealth-building tool truly.