Is your Mortgage Rate over 3.500%?

Refinancing your mortgage means replacing your current mortgage with a new loan. The most common reasons why owners refinance are to lower their interest rates and lower their monthly payments. However, homeowners may refinance for a variety of reasons, such as wanting to change the terms of the loan, using their home’s equity to make large purchases, paying off the loan more quickly, and more.

Refinancing works similarly to obtaining a home mortgage and involves many of the same documents, an application process, and doing your due diligence to find the right loan option for you. You’ll need to meet the lender’s requirements to qualify for a loan and go through underwriting and closing, the same as you did when you took out your home’s first mortgage.

Homeowners typically don’t refinance until they’re a few years into their current loan and have built up equity in their home. When interest rates are lower than what you’re currently paying, that’s a good time to consider refinancing. The generally accepted rule of thumb is that it’s okay to refinance if you can lower your interest rate by about 1 percent, but this rule of thumb may vary greatly. Factors such as loan amount and remaining term must be considered when calculating potential savings. The refinance rate fluctuates because of the market, and your final rate will be impacted by your credit score, your debt-to-income ratio, and home equity.

Sometimes it can take a few years to hit a “break-even point,” where you start to see savings after the upfront costs of refinancing. If you’re intending to sell soon, refinancing may not be the best option.

Here are the potential benefits and reasons why you may consider refinancing your home.

Reduce Your Interest Rate
This is a common reason why homeowners try to refinance and is typically a smart move. Lowering your interest rate could potentially save you hundreds of dollars a year. However, there is an upfront cost to refinancing. Closing costs and fees should be factored into the decision to refinance.

In addition, you should take into account the money you’ll be spending over the long run if you extend the terms of your loan. For example, if you’ve been making payments on a 30-year loan for five years, and then refinance to a lower interest rate with a new 30-year loan, you’re going to have an extra five years of payments. That doesn’t mean the refinance isn’t worth it, but it is something to keep in mind.

Lower Your Monthly Payment
Refinancing can significantly reduce your monthly payments, depending on your terms. These savings add up and can allow you to pay off other debts, build up your savings, or apply that extra money to the mortgage itself in order to pay off the loan sooner.

Pay Off Your Mortgage Faster
While a 30-year mortgage made sense as a first-time homeowner early in your career, you may now be in a stronger spot financially and able to pay more. Refinancing can cut years off your loan and potentially save thousands of dollars in interest over the life of the loan. Shorter term loans also typically carry lower interest than longer ones.

For example, if your mortgage has 20 years left on it and you refinance into a 15-year mortgage with a fixed rate, you’re paying off your loan five years faster. And since it’ll likely be a lower interest rate since it’s a shorter term, you may not even see much of a change in your monthly payments.

Change Mortgage Types
You may want to switch from an adjustable-rate mortgage (ARM) to a fixed-rate one. An ARM typically offers a lower interest rate for a set period of time, and then can reset after that to a higher (or lower) rate, whereas a fixed-rate loan will stay stable and predictable. ARMs work well for homeowners who don’t plan to own their home for more than a few years because they can capitalize on the lower interest rate in the beginning and then sell before those rates climb.

For homeowners who want to stay in their home for as long as possible, switching from an ARM to a fixed-rate mortgage can offer peace of mind for the rest of the term of their loan.

Eliminate Private Mortgage Insurance (PMI)
PMI is typically required of homeowners who purchase a home with a low down payment or no down payment at all. Because the homeowner is at a higher risk of defaulting on their loan, this type of insurance makes lenders feel more comfortable about loaning to them.

As time goes on and the value of the home increases while the balance of the loan decreases, homeowners may be able to ditch their PMI by refinancing and, in turn, reduce their monthly payments. It’s up to the lender to decide when it’s okay to remove the PMI, however.

Even if PMI can be cancelled without refinancing, homeowners who obtained a loan through the Federal Housing Administration (FHA) have an insurance premium that they will continue to pay until the home is sold or refinanced.

Use the Equity in your home To Borrow Cash
Equity is essentially what you “own” of your home, or the difference between what you owe and what it’s worth. Most homes increase in value over time, even more so if you upgrade aspects of the home while living there.

A cash-out refinance will allow you to refinance for a higher overall amount rather than what you currently owe. That way you are able to take the extra money out as a cash payment. You can use this to pay off outstanding debts with high interest rates, consolidate your debts, make home improvements, or make a large purchase like a car. However, this option can be risky, as you’re not reducing your overall debt or building up your equity, both of which are goals that most homeowners should have.

Should You Refinance?
Refinancing can be a savvy financial move if it reduces your overall costs, shortens the terms of your loan, or helps build equity. Be sure to keep in mind how long you plan to stay in the home, and remember that it may take years to hit your “break-even point,” where you can recoup the upfront cost of refinancing and actually see those savings roll in.

Bill Nickerson NMLS #4194 

 978.273.3227 | Email | Website 

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The Home Buying Deal Killers

Buying a home is very exciting. However, nothing can be a bigger disappointment than finding out that your loan is denied before you are about to close your transaction!

You’re a week away from having the keys to your new home and your loan officer calls to let you know that your loan was denied due to a change in your financial profile. This can and does happen, But there are a few things that you can do to make sure that this won’t happen to you.

Keep the following points in mind while you are in the process of buying your home:

1. Don’t Apply for New Credit of Any Kind.  Don’t respond to any invitations to apply for new lines of credit and don’t establish new lines of credits for furniture, appliances, computers, department stores etc.  Even if there are no payments for 12 months, we will need to count this debt against you.  This will also have an adverse effect on your credit score.  Wait until your loan closes to purchase items for yourself and new home.  It is also important to limit the amount of times you have your credit pulled, as each occurrence will need to be explained.

2.  Don’t Max Out or Over Charge on Existing Credit Cards. Running up your credit cards is the fastest way to bring your score down.  Once you have engaged in the loan process, try to keep your credit card balances to below 30% of the available limit.

3. Don’t Close Credit Card Accounts. If you close a credit card account, it can negatively affect your FICO scores as your credit is based on History.  You may have a card that is never used, but dates back 10 years and your scores do weigh heavily on this. If you really want to close an account, wait until after you close the loan.

4. Don’t Raise Red Flags to the Underwriter. Don’t change your name and address, don’t co-sign on another person’s loan. Don’t open up a new checking/savings account, make sure your taxes are filed. The less activity that occurs while your loan is in process; the better it is for you.

5. Don’t Make Large Unexplained Deposits Into Bank Accounts. Any Deposits into your bank accounts that do not match your past income history will be questioned by an underwriter unless the deposit is documented as a gift or can be explained.  This includes cash deposits and moving funds from one account to another. Make sure you write your offer check from the same account you intend on writing your purchase and sales deposit.  All bank accounts must be verified.

6. Don’t Make Changes to Your Employment/Income. Employment stability is a huge factor in the underwriting loan process.  Quitting or changing jobs or even moving positions within the same company can greatly endanger your loan approval.   Inform your loan officer immediately of any changes to your job, position or income and even the hours you work.

7. Your Down Payment:  Do you have your down payment all set? Is it in one account?  Have this prepared before you purchase your home.  Whether it is gift funds, liquidation of your retirement or moving funds from one account to another.  By having these funds all in one account, it will simplify the process.  If you receive a Gift, let’s say for $1,000 from family, Don’t deposit $900 or $1100, as this will be hard to explain why the amount is different from the Gift amount.  Keep it Simple!

8. Do not make any Large Purchases:  If you purchase furniture with no payments for a year, banks will debt you for this.  If you buy a small home in cash, banks will debt you for the taxes and insurance.  College Tuition, even if the loans are deferred, banks will add this to your debts.

Bottom Line: Don’t Make Any Adjustments/Transfers in Your Financial Picture. If you even had to question your decision, make sure you talk to your loan officer first. Don’t make any changes in investments, Move your accounts or transfer, close accounts, open new accounts, or substantially alter your asset picture.

Share this with anyone you know who may be purchasing a home.

Remember, if you have a question, please call me anytime!!  It may be the difference in owning your new home or being denied!!

Bill Nickerson | NMLS #4194  | (c) l 978-273-3227 | Email Me.

Bill’s Website

Proactive Buyers help escrow close on time!

Maybe it’s not the most fascinating topic of the day. If you’re buying a home, however, and that “time is of the essence” phrase on the purchase agreement is really applied, how easily and quickly your escrow closes is indeed the kind of thing that can keep you up at night. No one likes a long, drawn-out closing process if it can be avoided. So let’s look at what YOU and all parties can do to make this closing thing a piece of cake.

Unless your purchase is a cash transaction, the typical agreement calls for a 30 to 45 day close in which buyers, sellers, and vendors are working tirelessly to execute the terms of the purchase. The reason so many buyer agents put an escrow or transaction coordinator (TC) in charge of this process is simple — having one person there to keep everyone on track is more than a luxury. If closing is to take place on time, it’s a necessity. Once a purchase price is agreed to, and your earnest money deposit has been deposited in the escrow account, the TC will become your best friend. If you make him or her happy, you’re halfway there.

The first thing many agents and homebuilder reps do is to have you and the seller fill out a contact sheet. This sounds like a ridiculously simple task, and it is. But its importance should not be minimized. With all contact info of all parties, escrow is then able to proactively reach out and communicate to everyone and begin gathering all the necessary paperwork and information. This includes information on not only buyer and seller, but also their lenders (if the home is paid off, happy day…). The title company to be used is also listed, plus anyone else vital to the transaction closing.

Of course, the purchase agreement needs to be buttoned up with all the necessary signatures, and escrow will need to contact any homeowner associations (if they exist) that need to be made privy to the transaction. Yes. This part is important. Ask any agent around, and they will tell you that escrow is often not made aware when there is a 2nd HOA, leading to closing delays. The more complete the information is upfront, the better the process will be. In fact, it’s wise to ask your agent for a “road map” for how closing works so that you can gaze at it as each step is completed. It may help you stay sane.

Just because you’re in escrow doesn’t mean it’s time to take that much-needed vacation. There will be time for that after the close of escrow, even if it took you many months traipsing through hundreds of houses to find this one. Finding parties to the agreement for vital information is ten times more difficult when they are floating in a pool somewhere on a tropical island. When escrow calls and emails with a request, jump. You heard that right. The quicker you respond, the more time and energy is saved. Check voicemail, texts, and email regularly during this 30-day process and respond promptly to all vendor requests to ensure an on-time close.

And don’t be afraid to ask questions through the process. Typically, the person in charge of your escrow will move quickly through a lot of their checklist, but they are never too busy to answer questions and explain how and what the documents mean. Escrow also appreciates clear communication on any special requests. Can’t be there for the close and prefer to sign documents in the office with a notary, e-sign on your phone or computer, or have a mobile notary visit your home to sign? These are arrangements that need to be put in place long before the closing date. And if there are other parties to the transaction (like co-signers) the same applies to them.

The lender and escrow will inevitably need to rely on each other for accurate and timely disclosure of all fees, so introduce them right away. The sooner they become household words to one another, the quicker the documents can be produced accurately and made available for review. This shortens wait times and helps avoid unnecessary delays when the deal comes closer to final loan documents, which will begin being referred to as “docs” — not of the medical variety.

Home inspections and final loan approval (any and all conditions placed on your approval must be removed) must be satisfied and signed off on before that magic day happens. So, if you’re in doubt that you are not doing all you can, call your lender, the TC, and even the escrow company to ensure that you are doing all you can to make this happen on time. Be the squeaky wheel, even though you may feel you are surrounded by all manner of experts who reassure you everything is fine. They may have dozens of transactions to be concerned about. You only have one.

Source: TBWS

Training for the Pan Mass Challenge

Bill Nickerson | NMLS #4194 | 978.273.3227 | Bill@billnickerson.com

 

If you can afford to Rent, Then you can afford to Buy!

If You Can Afford to Rent…Then You Can Probably Afford to Own.

Interest rates are near historic lows. Purchasing power has increased, and the cost of renting in many areas is now greater than the cost to buy. Some say mortgage loans are impossible to obtain without perfect credit and 20% down. Want the truth? Read on, and we’ll cite the three basic factors for qualifying for a home loan. 

Income – If you have a job or steady source of income, you’re off to a great start. If you’re already able to pay your rent on time each month, this could actually be easier than you might think. 

Assets – You rarely need a 20% down payment. In reality, many programs will work with 5%, 3.5% or 3%, and in some cases, even 0% down. As well, closing costs can sometimes be paid by lenders, sellers or come from gifts or grants. So if you think you’re out of luck just because you don’t have tons of cash, no worries. Chances are still good there’s a solution that may work.

Credit – Your credit is likely in good shape if you pay your bills on time and have avoided major issues like bankruptcy, foreclosure, short sales and judgments. Requirements will always vary, but there can still be reasonably flexible loan options, such as the FHA and Fannie Mae which both allow for low credit scores.

 That’s it. These three items are the fundamentals of mortgage lending. Exceptions will exist, but don’t be fooled into thinking the process is impossible. For those who work and pay their bills, there may not be a whole lot standing in the way of homeownership.

 I would like the oppurtunity to consult with you and start you on the path of Homeownership.  Whether it be for Today or planning for Tomorrow!

           Bill Nickerson NMLS #4194  | 978.273.3227  | Email | Website

Take the emotion out of buying a home using good business sense

There is a good deal of emotion wrapped up in buying a home. Determining where we will spend the most intimate as well as memorable moments of our lives is no small decision. And it is no doubt one of the biggest investments most of us will ever make.

Removing emotion is no easy task. But if we make an attempt to screw our heads on as investors and looked at buying home the way we might buy a stock or mutual fund, education is the key — asking what considerations are necessary in order to have a knowledge base before acting.

If you’ve been a renter, you know there are advantages to it as well as freedom. But what about the future, and permanency? The idea of buying goes beyond renting, since you are pouring your money into a single bucket all your own — not someone else’s. Even before that final mortgage payment is made, you will have been living in your investment as physical shelter, which is why buying a home is still considered one of the safest investments around. It’s not just a piece of paper, an account number or a line on a graph.

Look at this as a business proposition first and foremost by scrutinizing the proximity and access to basic services regarding health, supply, security, and transport. That house way up on a hill may make your heart flutter, but if minimum requirements such as electricity and gas systems, lighting, waste collection, and sewer services are a concern, your little slice of heaven can soon turn into a nightmare. It’s also a good idea to inquire about infrastructural projects in the area that have the potential to increase or decrease the value of the property. Can that golf course eventually get sold to developers for more housing? Will those abandoned railroad tracks get used for future transit? Either you or your Realtor can visit the local city planning offices and pose these questions or just take a look at plans for the area.

What about your personal needs? Will local regulations or the governing entity of the neighborhood allow you to build on to the existing structure or renovate the exterior? Speaking of exteriors, building materials are not meant to last forever. Whether the home you are considering is stucco or siding, think about painting and repairs down the road. If most of the interior is carpeted, what kinds of expenses would you be subject to when you replace it all with hardwood?

It’s always recommended that you accompany the individual doing the physical inspection of the house you are considering. Try out the water pressure, check the electric meter and boards, and hold your hand up to the AC vents. If a breaker trips in the middle of the night in a snowstorm, where will you have to traipse to re-set it? This is also when you can educate yourself as to the structural system of the house, including how to access some areas you don’t need on a daily basis. Your home becomes a living, breathing entity when you think of it as a vessel that needs care, maintenance, and an occasional face-lift.

Even though a home can be staged for sale beautifully with furniture and accessories, it’s important to visually remove the temporary fluff and consider whether your own furniture will fit if you don’t intend to buy all new items. A few overstuffed chairs facing a fireplace do not equal a family of four facing a big screen TV over that same fireplace. How much room would be left over for an adequately sized sofa or sectional? And when looking at bedroom space, has the stager used mostly twin beds in secondary bedrooms? Can you turn around in the laundry room when someone opens the door to the garage?

While a home’s listing should give you most of the financial information you’ll need, it may not tell it all. The costs of things like homeowners association fees (if any) should be a concern — how well is the association managed, are there any liens or lawsuits pending against it, how often has the fee gone up and what does it cover? Does the neighborhood have supplemental taxes levied against it for expenses normal property taxes don’t cover, such as lighting and landscape corridors? Some of these extra taxes last up to 25 years from the time a home is built, and not all are write-offs on taxes.

Of course, your knowledge of the market surrounding the house you are considering is key as well. What homes have sold recently, what was included in the price and how long did they take to sell? How does this house compare to any of them, and why might it be worth more or less? It may seem like overreach, but ringing a few doorbells in the surrounding neighborhood and asking a few questions is not a bad idea when you are considering such a large investment.

And lastly, know your rights as a consumer buying real estate, whether you have professional representation or not. Read up about them online or buy a few books so that you are at least armed with a slew of questions. You’ll be glad you did a little prep work, took some of the emotion out of the equation, and looked at this as an important personal business investment.

Source: TBWS

Bill Nickerson NMLS #4194

Over-improving your Home: doing too much of a good thing

Homeowners doing major renovations this summer may not want to hear it, but there’s actually such a thing as doing too much. Spending too much. Adding too much.

Bankrate‘s Dana Dratch says over-improving means you may be bringing a curse upon yourself: sinking so much into upgrades, renovations or additions that you’ve burned nearly all the equity of your home. If you plan to stay in your house for the rest of your life, perhaps it can eventually pay off. While it may increase the value of your property if you, like many homeowners, need to sell in the next 5-10 years, it’s likely you may never get 100 cents on the dollar, no matter what the improvement.

No. It doesn’t mean to stop dead in your tracks for your next renovation project. But it does mean you need to be careful in planning it, costing it out, and making sure it isn’t an exception to the rule in your neighborhood. Of course, if the improvements are for your own convenience — like adding a first-floor bedroom because you can’t face the stairs any more — that’s fine. But if your sole purpose is to increase the price of your home when you go to sell it, don’t take bets on it.

Dratch recommends asking yourself a few questions before you dive in. As mentioned, go ahead and over-improve if you’re going to stay there for a long time. If not, and your plan is to move in the next three to five years, resist the urge and bide your time. Realtors agree, however: there’s one in every neighborhood. There is always one guy who convinced himself that if he adds enough granite, hardwood, and molding to his modest house, he can get a premium price when it sells. Dratch quotes a Realtor who says, “Just because a house has new countertops and a brand-new master bath doesn’t mean you’ve made more square footage in your house. Compared to houses down the street with the same amount of square footage, the prices will be basically the same,” she says.

Watch a lot of HGTV? Remember that the Fixer Upper couple as well as the Property Brothers look for the shabbiest, lowest-priced house in the BEST neighborhoods. Once they’ve done their magic, that house will simply match the value of the homes around it.

If you own a $400,000 house in a $400,000 neighborhood and do a slew of renovations and additions, don’t plan to turn around and list it for $700,000. Your Realtor can help you by checking values and running comparable properties in your area to see if your plans are in line with what appraisers can get their heads around or you are totally off-base. Why do you need to appease appraisers? Because the majority of homebuyers get a mortgage, and a bank won’t lend on a house unless the appraisal makes sense.

Seems unlikely, but even kitchens and bathrooms can be overdone. AND it can scare buyers. If your house is the most expensive in the neighborhood, potential buyers will be apprehensive about signing on the dotted line. Adding a room and increasing the square footage may mean the house should be worth more, but if that addition puts you at or over the highest prices in the neighborhood, it won’t be a cakewalk to sell. On top of that, you may have just taken up a chunk of yard space with it. The size of the yard matters to buyers, even in the most upgraded house.

Did you go crazy taking out closets to make playrooms, dens, and home offices or using a bedroom as a walk-in closet? You just lowered your bedroom and bath count and lowered the value of your home. Appraisers don’t consider a room a bedroom without a closet. Oh, and that gorgeous pool and spa you spent $50K putting in? To some buyers, it represents hours of good times and entertaining. To others, it represents bigger energy bills and maintenance. It also might take up too much of your yard, leaving little room for kids to play and dogs to romp.

If you are selling your home in the near future, keep your improvements neutral and check with your Realtor about whether the renovations you have planned offer a decent return on investment.

Source: Bankrate, TBWS

Bill Nickerson | NMLS #4194 | 978.273,3227

Bill Nickerson NMLS #4194

5 Indicators of Where the Market’s Headed

5 Leading Indicators to Gauge Where
The Real Estate Market Is Heading

There are several key indicators that may predict what to expect in the weeks and months ahead. Instead of relying solely on the more sluggish statistics of home sales and pending contracts, knowing the following info will give you a much clearer perspective on the market.   

In total, there are five leading economic indicators:

#1: New listings available – On the supply side of things, signs of improvement are on the horizon.

In April, Redfin reported there was a staggering year-over-year decline in new listings of just over 50%. Now, however, both Redfin and Realtor.com have shared data from mid-May showing that annual stat has already shrunk to around 30%.

#2: Demand for homes – It’s no secret the real estate market relies heavily on supply and demand.

Thanks to states slowly opening back up for business, CNBC reported buyers have been “coming out in force,” wearing their masks for showings and ready to buy sooner than anticipated. Even in the first week of May, Redfin had noted its agents were experiencing demand that was 5.5% higher than even 2020’s pre-pandemic numbers. And just last week, mortgage applications rose 6% from the week before. Demand has also been fueled by the fact mortgage rates remain generously low, and many agents are doubling-down on using tech to show homes and close deals as needed.

#3: How long houses are sitting – As past trends would show, the longer a house takes to move, the more likely it may sell for less than its asking price.

Some sellers may find themselves waiting a bit longer to close a deal, as  Realtor.com recently found properties in the 99 largest metros across the country have been on the market for an average of 13 extra days, compared to a year ago. And even though buyers have been coming back out of the woodwork, there’s still a decent amount of would-be homeowners waiting until it feels a little safer to make the commitment.  The National Association of Realtors (NAR) did a survey where 40% of agents said their clients put their purchasing on pause for “a couple of months.

#4: Pricing – Although recent data has shown home prices are still 1.4% higher than a year ago,

Zillow has forecasted an overall dip of 2-3% by the end of 2020. While this may not be the news some people want to hear, to put this in perspective, we survived a much larger dip when the Great Recession dented home prices just over 27%. Plus, this is just one perspective. Fannie Mae has forecasted that the average existing-home price in 2020 will be $283,000, which is an overall growth of 4% compared to 2019.

#5: Job markets / unemployment rates

As with any other part of the economy, employment and financial stability influence the real estate market. As noted before, a decent segment of agents have reported their clients hitting the pause button on their home searches for a couple months. When it comes to those looking to sell, it really comes down to their personal situations. Some may want to stay put to avoid struggling to find their next abode, others may need the cash and/or want to shed having a monthly mortgage payment lingering over their head.

The market is still active. Your clients don’t have to sit on the sidelines while rates are at all-time lows. Contact me today to see how we can work together to help your clients match with a mortgage that meets their current needs, while supporting their goals for the future.

Bill Nickerson | Senior Loan Advisor | Flagstar Bank | Email | Bill’s Website

1500 District Avenue, Burlington MA | NMLS #4194

Can you still purchase and negotiate a home during this time?

3 Key Things To Know When Purchasing        Property In A Pandemic

While the ongoing pandemic has created a lot of uncertainty within industries and households alike, one thing is for sure:

Over the last couple months, the entire world has shown an astonishing ability to adapt and get things done. Technology (ex. virtual tours) has allowed agents and clients to continue working together.

If you have clients looking to make a home purchase right now, I’d like to share three key points you can guide them on during this time.

1. “How do I negotiate an offer right now?”  Empathy and awareness are important. While sellers might be open to lower offers during this time, most people won’t want to deal with someone they feel is trying to low ball and take advantage of the situation. Help clients understand the value of the home they’re interested in, and help create a reasonable offer.

2. “Understand a longer closing period is likely” For now, going straight from getting that offer accepted to the closing table is no longer the norm. With social distancing being a top priority, many of us are shifting to remote work. Clients should know that closing may take longer than the usual 30 days, while appraisers, home inspectors, and repair contractors adjust their workflow and availability.

3. “Waiting for loan rates to drop may backfire” Due to COVID-19, rates and investor guidelines are changing on a day-to-day basis. Because of this, locking in current mortgage loan rates instead of floating them to hope they go down further may be the wisest choice for clients, right now. With rates already at historic lows to begin with, this also locks in the underwriting guidelines at the same time so clients aren’t affected by subsequent changes.

By locking in a mortgage loan rate today, your clients can rest assured they’ll have a rate (and loan qualifications) that won’t budge due to changes in the market.

Additional Tip: Encourage your clients to over-communicate with their lender. Once again, the credit markets are shifting rapidly right now. It’s more important than ever for your clients to be working closely with a mortgage professional like me that can help keep them in the loop, find and secure the best financing for their current situation (and future goals), and swiftly navigate the closing process.

Contact me today to discuss how we can work together to help your clients negotiate an offer for their dream home during this time!

Bill Nickerson | Senior Loan Advisor | NMLS 4194

Cell: 978.273.3227 | 1500 District Ave |  Burlington, MA  01803

Bill’s Email

Can you answer Yes to any of these questions??

If you or someone you know can answer Yes to any of these questions, we should talk!!

• Paying PMI (private mortgage insurance)
• Have an Adjustable Rate Mortgage
• Credit Card Balances over $10,000
• Need cash for renovations to your home
• Have a First and Second mortgage to combine
• Your Home Equity Line of Credit keeps going up?
• Simply lower your rate and payment
• Reduce your term to a 20, 15 or 10 year mortgage
• Finance your Child’s College Education
• Is your your 30 Year Fixed Rate mortgage over 4.00%?
• Is your your 15 Year Fixed Rate mortgage over 3.50%?

These are just some of the reasons it may be time to refinance your home and create cash-flow monthly.  It’s not just about interest rate anymore, it’s about cash-flow!  Creating wealth by increasing your monthly cash-flow.

Will you create a positive monthly cash flow each month?

The longer you have the new loan, the more the savings add up. A $1,200 per year savings could grow to tens of thousands over the life of the loan. If you apply your monthly savings to your principal, you will save even more on interest and own your home sooner.

Bottom Line: If it saves you money  by lowering your rate,  lowering your term or consolidating debts to create cash flow to improve your financial situation, then it is worth looking in to.  If it allows you to create more space in your home, update or renovate, invest in a second home, or even cover the costs of College or a Wedding, then its worth looking into.  Everyone’s loan balance is different, credit score, income and the amount of money borrowed.  So your situation will be different from others.  You owe it to yourself and your family to create your own wealth.

I am always happy to go over real numbers specific to your situation. Reach out anytime and we can see what advantages might be available for you and your family.  

Feel free to call me on my cell at 978.273.3227 or Email

Bill Nickerson NMLS #4194

How does refinancing save homeowners money?

Question: How does refinancing save homeowners money?

There are two categories of refinancing, “rate-and-term” and “cash-out.” Both can save you money.

The first type, rate-and-term, replaces your existing loan with one that has a better rate and/or terms. You might replace an ARM or balloon loan with a fixed-rate loan, for example. Or you may decide to lower your rate AND shorten your term. Some borrowers have been able to refinance from a 30-year loan into a 15 or 20-year loan, reducing the term, without appreciably raising their payments.

A borrower does not receive any significant amount of cash in a rate-and-term refinance; lenders generally consider that any cash proceeds above $2,000 pushes the loan into a cash-out category.

There are always certain costs involved in any mortgage transaction; there will always be fees for title, escrow, underwriting and document preparation, for example. Borrowers can add these fees to their new loan so as to avoid having to pay them in cash. Financing these items is not considered cash-out.

When you are deciding whether to do a rate-and-term refinance, you should evaluate it in two primary ways: first, how long will it take to recover the cost of doing the loan? For example, if the closing costs amount to $3,000 and the reduction in rate gives a saving of $1,500 per year in the first year, it will take approximately two years to “break even.” For most people, this time frame is more than satisfactory, but you should make your own decision. The second criterion is net savings over some time period, say five years, ten years or more.

Homeowners with adjustable rate mortgages (ARMs) may decide to refinance into a fixed rate loan, even though their rate may initially be higher, they might feel more secure knowing that their rate will never change. This is more of a defensive strategy to guard against the possibility of a higher rate in the future, but it may not “save money.”

The other type of refinance, a “cash-out,” is one where the borrower receives cash of more than $2,000 at closing. This is accomplished by getting a new loan that is larger than the balance of the old one plus closing costs. Borrowers can use that money for anything. Some homeowners have used cash-out refinances to pay off consumer debt, like car loans, student loans, and credit cards. Using home equity to pay off credit cards can drop the payment dramatically! But paying down installment loans can create a false economy. A $30,000 car loan with an interest rate of 6% will have a payment of $500, but paying off that loan with the proceeds of a home refinance will effectively drop the payment to $150—but does it really make sense to finance a car for 30 years?

Hope this is useful

Bill Nickerson

Bill Nickerson NMLS #4194  | bill@billnickerson.com | 978-273-3227