Revising your payments, on your terms.
Refinancing your mortgage is easy when you have the advantage of an experienced mortgage lender on your side. We'll make sure that when you’re ready to refinance your mortgage loan, you're getting the best rate and the best deal possible. Have questions? Just let us know. Our lenders are ready to speak to you.
When should I refinance?
It's generally a good time to refinance when mortgage rates are 2% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only 1% or less. Any reduction can trim your monthly mortgage payments. Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%; if the rate were lowered to 7.5%, your payment would then be $700, now you're saving $70 per month. Your savings depends on your income, budget, loan amount, and interest rate changes. We help you calculate your options.
Should I refinance if I plan on moving soon?
Most lenders charge fees to refinance a loan. So, if you plan to only stay in the property for a couple of years, your monthly savings may not accumulate to recoup these costs. Example: A lender charged $1,000 to refinance your loan that resulted in saving you $50 each month; it would take 20-months to recoup your initial costs. Some lenders will charge a slightly higher than average interest rate on refinance loans, but will waive all costs associated with the loan. This will depend on the interest rate on your current loan.
How much will it cost me to refinance?
In most cases, you will pay similar costs you had with your current home loan for the title search, title insurance, appraisal fees, etc. Depending on your new loan amount the total closing costs could be approximately be 2-3% of the loan amount. If you don’t have the funds to pay for associated loan costs or lack sufficient equity in the home to roll the closing costs into the new loan, you can request a "no-cost" loan, which will charge a slightly higher interest rate for the lender to pay the closing costs on your behalf.
What are points?
A point is a percentage of the loan amount (1-point = 1% of the loan) so one point on a $100,000 loan is $1,000. Points are costs that need to be paid to a lender to get mortgage financing under specified terms. Discount points are fees used to lower the interest rate on a mortgage loan by paying some of this interest up-front. Lenders may refer to costs in terms of basic points in hundredths of a percent, 100 basis points = 1 point, or 1% of the loan amount.
Should I pay points to lower my interest rate?
Yes, if you plan to stay in the property for at least a few years. Paying discount points to lower the loan's interest rate is a good way to lower your required monthly loan payment, and possibly increase the loan amount that you can afford to borrow. However, if you plan to stay in the property for only a year or two, your monthly savings may not be enough to recoup the cost of the discount points that you paid up-front.
What does it mean to lock the interest rate?
Mortgage rates can change from the day you apply for a loan to the day you close the transaction. If interest rates rise sharply during the application process, it can increase the borrower’s mortgage payment unexpectedly. Therefore, a lender can allow the borrower to "lock-in" the loan’s interest rate, guaranteeing that rate for a specified time period, often 30-60 days, sometimes for a fee. The most common lock is 30 days. We also offer 45 and 60 day lock periods.
Should I lock-in my loan rate?
It's unsure how interest rates will move at any given time, but your lender may estimate where interest rates are headed. If interest rates are expected to be volatile in the near future, considering locking your interest rate will be beneficial because it allows you to qualify for the loan. If your budget could handle a higher loan payment, or lender's lock fees, you may want to let interest rates "float" until the loan closing.
I’ve had credit problems in the past. Does this impact my chances of getting a home loan?
Even with poor credit getting a home loan is still possible. A lender will consider you to be a risky borrower and to compensate for this they will charge you a higher interest rate, and expect a higher down payment usually 20%-50%. The worse your credit history is, the more you can expect to pay.
Speak with a Great Plains Bank loan officer to determine if anything can be done in the short term to increase your credit score. Often times, credit card utilization is an underlying factor in lower credit scores. Simply paying down credit balances can improve scores to allow for loan qualification.
Should I choose the lender with the lowest interest rate and costs?
There are two important things to consider when choosing one lender over another one. Consider:
- Quality of Service – There are a number of things to consider when finding a mortgage or refinancing. Having a lender you can trust will make the process smoother and more comfortable.
- Cost of Services – It’s good to ask potential lenders upfront what they charge for their services and any fees involved. They should be able to give you facts and get you through the financing process so that you feel confident knowing that you made a good decision by choosing them.
Should I refinance?
- Instructions: Enter current mortgage, home, and refinance information. This calculator analyzes the total cost and savings of your refinance transaction as well as principal balance when you sell your home and break even periods.
- Explanation: Based on your current and calculated mortgage payments, this calculator figures your monthly savings. It also compares your principal balance in five years with and without refinancing. Based on your total cost to refinance, a break-even period is calculated in relation to your monthly savings. The time value of money and income tax deductions are not considered in this refinance calculation.
- Disclaimer: We cannot guarantee the accuracy of this calculator. You should check with your finance provider before entering into any contracts.