San Diego Refinance - San Diego Home Equity Loan
Welcome to our San Diego Refinance Center. View the today's Interest Rates which we offer that are from the lowest in San Diego, and request a rate lock at the interest rate you are comfortable with. Planning to Refinance your current home loan or need a Home Equity Loan? Use our Mortgage Refinance Tools to compare loan programs, such as Conventional, Jumbo, Subprime, Second mortgage, Home Equity Loan, fixed interest rate, ARM interest rate, balloon mortgage, interest only and reverse mortgage loan. View the current Interest Rates on the refinance loan program you want and complete the PDF Loan Application and fax it to us at (619) 564-3415, or if you prefer Request a Refinance Loan Application package be sent to you, or call us at (619) 921-0284 to have a professional loan officer to take your loan application in person. Don’t forget to visit the about us page to learn more about us and the extensive real estate, Mortgage home loans, refinance and home equity loan services we offer.
Refinance Considerations
When you're making your decision, there are several things to keep in mind.
If your current interest rate is significantly higher than today's lowest rates, you may be able to roll your loan costs into the loan and still get a lower rate than you have today, thereby reducing your interest payments and saving money immediately.
Second, if you are planning to stay in your home for at least three to five years, it may make sense to pay "points" (a point equals 1% of the loan amount) and closing costs to get the lowest available rate.
And third, you can avoid laying out cash and still get a low rate by adding the points and closing costs to your new mortgage. Does that mean shouldering a lot of extra debt? Not necessarily. If you've had your current mortgage for at least three years, you've probably reduced your balance by several thousand dollars. So you may be able to tack your closing costs onto your new loan and still end up with a mortgage that's smaller than your original one - plus, of course, a lower rate and lower monthly payment.
Build Home Equity Faster
Many borrowers use a refinance to shorten the term of the mortgage. And brace yourself, even at low rates, a shorter term means a higher monthly payment. The benefit is that you'll build up equity faster and pay far less in total interest over the life of the loan.
If you can't afford the payments on a 15-year mortgage, your next best means of building equity is to refinance for less than 30 years. To do so, ask your mortgage company to customize your new loan's term to match the years that are left on your old loan - if you are five years into a 30-year mortgage, for example, ask for a 25-year loan.
Trade Your ARM Adjustable Rate for a Fixed Rate
By switching to a fixed rate loan, you will not only reduce your payment, you will also likely lock in an attractive rate for as long as you own your home.
In fact, while one year ARMs currently offer tempting introductory rates averaging 5.50%, most experts recommend avoiding them, because you could easily find yourself facing sharply higher payments in the near future, even if interest rates don't rise. Why? Well, after the introductory rate expires, ARMs are typically pegged to the one year Treasury rate (recently 5.25%) plus 2.75 percentage points, with increases of as much as two points a year. Assuming interest rates don't change, you would pay 7.50% in the second year (the full two point increase) and 8% or more in the third year.
There are certain cases, however, where an ARM makes sense. If you are fairly certain you'll be moving within five years, you can save some money and avoid rising payments with a five year ARM, recently averaging less than 6.00%. Such loans offer a fixed rate for five years and adjust annually thereafter.
Mortgage Refinance Costs
When you refinance your mortgage, you usually pay off your original mortgage and sign a new loan. With a new loan, you again pay most of the same costs you paid to get your original mortgage. These can include settlement costs, discount points, and other fees. You also may be charged a penalty for paying off your original loan early if applicable. The total expense for refinancing a mortgage depends on the interest rate, number of points, and other costs required to obtain a loan. To obtain the lowest rate offered, most mortgage companies will charge several points, and the total cost can run between three and six percent of the total amount you borrow. So, for example, on a $100,000 mortgage, the company might charge you between $3,000 and $6,000. However, some companies may offer zero points at a higher interest rate, which may significantly reduce your initial costs, although your payments may be somewhat higher.
Paying Points for a Lower Rate
In refinancing, a mortgage company usually offers a range of interest rates at different amounts of points. A point equals one percent of the loan amount. For example, three points on a $100,000 mortgage loan would add $3,000 to the refinancing charges.
Analyzing various interest rates and associated points may save you money. As a rule of thumb, each point adds about one eighth to one quarter of one percent to the interest rate the mortgage company is offering.
Generally, the lower the interest rate on the loan, the more points the lending institution will charge. Some companies offer refinancing with no points, but generally charge higher interest rates.
To decide what combination of rate and points is best for you, balance the amount you can pay up front with the amount you can pay monthly. The less time that you keep the loan, the more expensive points become. If you plan to stay in your house for a long time, then it may be worthwhile to pay additional points to obtain a lower interest rate.
Some companies may offer to finance the points so that you do not have to pay them up front. This means that the points will be added to your loan balance, and you will pay a finance charge on them. Although this may enable you to get the financing, it also will increase the amount of your monthly payments.
Analyze Your Savings and Costs
Check the market closely to determine the available rates and costs associated with refinancing. These costs can include items such as an appraisal and other various fees and points. Then determine what your new payment would be if you refinanced. You can estimate how long it will take to recover the costs of refinancing by dividing your closing costs by the difference between your new and old payments (your monthly savings). However, the ultimate amount you may save depends on many factors, including your total refinancing costs, whether you sell your home in the near future, and the effects of refinancing on your taxes. The old rule of thumb used to be that you shouldn't refinance unless the new interest rate is at least two percentage points lower. However, many companies are now offering zero point loans and low cost refinancing. Therefore, even if your rate change is less than one percentage point, you may be able to save some money by refinancing.
Your Personal Income Taxes
With a lower interest rate on your home loan, you will have less interest to deduct on your income tax return. That, of course, may increase your tax payments and decrease the total savings you might obtain from a new, lower-interest mortgage.
You should be aware of an Internal Revenue Service (IRS) ruling with respect to points paid solely for refinancing your home mortgage. IRS regulations require that interest (points) paid up front for refinancing must be deducted over the life of the loan, not in the year you refinance, unless the loan is for home improvements. This means that if you paid a certain number of points, you would have to spread the tax deduction for those points over the life of the loan. If, however, the loan or a portion of the loan is for home improvements, you may be able to deduct the points or a portion of the points. Check with the IRS regarding the current rulings on refinancing, particularly if you are using the new loan to make home improvements.
Deciding to Refinance
Traditionally, the decision on whether or not to refinance has meant balancing the savings of a lower monthly payment against the costs of refinancing. But in recent years, companies have introduced "no cost" and low cost refinancing packages that minimize or completely eliminate the out-of-pocket expenses of refinancing. Keep in mind that these refinancing packages compensate with a higher interest rate, or by including some of the costs in the amount that is financed.
San Diego Mortgage Broker
San Diego Funding & Realty and George Alexiou serves San Diego County as a Realtor® and Mortgage Broker. We serve real estate clients seeking to refinance or need a home equity loan in Allied Gardens, Alpine, Bonita, Bonsall, Cardiff by the Sea, Carlsbad, Carmel Valley, Chula Vista. Clairemont Mesa, College Grove, Coronado, Del Cerro, Del Mar, Downtown San Diego, Eastlake, El Cajon, Encanto, Encinitas, Escondido, Fallbrook, Golden Hill, Hillcrest, Imperial Beach, Jamul, Julian, Kensington, La Jolla, La Mesa, Lakeside, Lemon Grove, Leucadia, Linda Vista, Logan Heights, Mira Mesa, Mission Beach, Mission Hills, Mission Valley, Mission Village, National City, Nestor, Normal Heights, North Park, Ocean Beach, Oceanside, Old Town San Diego, Olivenhain, Otay Mesa, Otay Ranch, Pacific Beach, Paradise Hills, Point Loma, Poway, Ramona, Rancho Bernardo, Rancho Del Rey, Rancho Penasquitos, Rancho San Diego, Rancho Santa Fe, Rolling Hills Ranch, San Carlos, San Marcos, San Miguel Ranch, San Ysidro, Santee, Scripps Ranch, Solana Beach, Sorrento Valley, Spring Valley, Tierrasanta, University City, Valley Center, Vista and nearby cities, supplying San Diego clients with mortgage services, home loans, refinance existing home loan, home equity loan, MLS and school information.
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