Lifestyle real estate newsletter | august 2020
Does refinancing make financial sense? There is a lot of buzz in the mortgage world right now surrounding refinancing. As rates have hit historic lows, homeowners are lining up to make big changes to their payments. However, refinancing comes at a cost which may result in paying more for the loan than you save. My advice? Do your research first to find the most competitive mortgage available, determine whether or not it will save you money, and determine how long it will take you to save money.
When You Should Refinance
Mortgage refinances can be a great tool for saving thousands, if not hundreds of thousands, over the life of the loan. Here are some examples of when a refinance makes sense: ● You are staying in the home long enough to break even and then save money. ● You are refinancing to remove private mortgage insurance off of your payment. ● You are refinancing to a shorter-term loan thus reducing your interest rate and the number of years you of repayment.
Costs Associated With Refinancing
A mortgage loan refinance is not free. There is a possibility that you won’t have to pay money out of pocket, but the fees would be added to your principal balance and ultimately you will pay interest on that amount added to the loan. The chart below shows the common fees associated with a mortgage refinance and about how much they would cost based on a $300,000 loan.
Fee Type Appplicaton / underwriting fee Origination fee Interest rate discount points Credit Report fee Appraisal Title Fees
Typical Cost $75 - $500 up to 1.5% of the Balance up to 2% of the balance $50 $300 - $400 $500 - $1000
rate of 4.5% and their principal and interest payment is $1520. Assuming the same initial loan amount, if they refinance to a 3% interest rate their payment will reduce to $1265. This is a savings of $255 per month. However, according to the chart above it cost the homeowner $4850 to get the refinance. Therefore, their breakeven point is after 19 months. As long as they aren’t extending the loan term a significant amount the refinance would be a sound financial decision as long as they live in the home for more than the 19 months. Take your time to shop around and really consider whether a mortgage refinance makes the most sense for your financial situation. Make sure it is saving you thousands and not costing your thousands. For additional information on our local market, call 206.730.0962 or email, nina@ninabjornstal.com.
Calculate Break-Even Point
Once you have found the best rates, it is time to calculate your break-even point. Let’s assume the homeowner has a current interest
N I N A B J O R N S TA L 206.730.0962 | Cell or Text nina@ninabjornstal.com | E https://realestatenina.com | W
15117 Main Street B106 | Mill Creek WA 98012
N I N A B J O R N S TA L 15117 Main Street B106 Mill Creek WA 98012
closed sale | $510,000
13826 Cascadian Way|Everett 98208 MLS #1612856 | Multiple Offers 3 Beds | 2 Bath | 1592 Sq Ft 4 Days on Market Nina Bjornstal | Listing Broker
The market continues to be hot for sellers and definitely a challenge for buyers with limited inventory still a major challenge. Both Sellers and Buyers will be in for a fast market as the summer real estate season continues. See the virtual tour at: https://www.seetheproperty.com/350078
Market watch update | see the market trending in your county june 2020
July 2020
King County
Median sale price: $680,000 h Average sale price: $819,927 h List to sale price: 100% Months of Inventory: 1.4 i Avg Days on Market: 29 i
King County
Median sale price: $625,000 i Average sale price: $754,187 i List to sale price: 100% Months of Inventory: 1.8 h Avg Days on Market: 31 h
Snohomish County
Snohomish County
Pierce County
Pierce County
Median sale price: $505,000 h Average sale price; $550,379 h List to sale price: 100% Months of Inventory: 1.73 i Avg Days on Market: 28 i Median sale price: $385,000 h Average sale price: $427,247 h List to sale price: 100% Months of Inventory: 1.2 i Avg Days on Market: 27 i
Median sale price: $486,915 i Average sale price; $520,598 i List to sale price: 100% Months of Inventory: 1.5 i Avg Days on Market: 30 h Median sale price: $380,000 i Average sale price: $412,410 i List to sale price: 100% Months of Inventory: 1.6 h Avg Days on Market: 31 h
I am currently taking on new clients.
The most sincere compliments I receive are the personal referrals from you. Thank you so much! Remember how much fun we had finding your home? I’d love to help them create new memories, too.
N I N A B J O R N S TA L 206.730.0962 | Cell or Text nina@ninabjornstal.com
If your home is currently listed this is not a solicitation for your listing, please disregard this mailer. | 20 20 Lifestyle real estate by nina