The Cost of Waiting

Mary Beth H.:                    Hi, this is Mary Beth Harrison with Dallas Native Voice, and I’m sitting here with our friend Jason Browning again. Wow, I want to talk about the market. It’s really kind of interesting right now. Interest rates are still incredibly low.

Jason Browning:               Yes they are. I think for the foreseeable future, we’re going to … Some peaks and valleys. It’s not going to always be going straight down in a straight line, but we are going to be seeing some rates stay this low and considerably… may could go a little bit lower as well.

Mary Beth H.:                    Interesting. I would have bet everything I owned that interest rates would not still be this low. I mean I would’ve lost my home, my car, my family, my… I would have bet everything I own that there’s no way it would still be this low.

Jason Browning:               Yeah. I think if you would have guessed six to eight months ago, you would have still been saying rates were on the increase.

Mary Beth H.:                    Yeah, and they were.

Jason Browning:               Yes, they were.

Mary Beth H.:                    So it’s such a strange market. I will say for all of our clients who bought back in, gosh, as early as maybe 2000… What? ’12, ’15? Somewhere in there… need to be refinancing.

Jason Browning:               Oh, absolutely. I mean you can even have someone that purchased two to three years ago, two years ago, I would say, especially if they have their PMI. I mean that would be something that you could look at getting that removed with appreciation and with the rate itself.

Mary Beth H.:                    Very good point. Let’s talk about that. When you don’t put 20% down, then the bank charges or the government… Whoever charges it, someone gets it… private mortgage insurance, right?

Jason Browning:               Correct. That’s right.

Mary Beth H.:                    That’s a percentage of the loan.

Jason Browning:               That is correct.

Mary Beth H.:                    So you’re paying the mortgage and then you’re paying this additional [crosstalk 00:01:46].

Jason Browning:               It’s insurance basically.

Mary Beth H.:                    Right, and the insurance is that if you were to foreclose, and you’ve only put down say 5%… Let’s take a $100,000 house, you’ve got $5,000 in it. Why wouldn’t you walk away? I mean if things got really tough, I think that’s the argument to be made is that.

Jason Browning:               Yes, right.

Mary Beth H.:                    This is insurance that they’re collecting that if you were to walk away, they would have money to hold the house for that period of time.

Jason Browning:               Right, and it helps them prep that home to get it back on the market as fast as possible. That’s really what that’s meant to do for them.

Mary Beth H.:                    Got it. So PMI is kind of just this additional charge. If you closed a house almost at any point and have PMI on it, this would be the perfect time to refinance that house and get that PMI reduced.

Jason Browning:               Absolutely. I talked to one of our clients within the last three months from the close. Saved them almost $400 a month on a lower interest rate and losing the mortgage insurance.

Mary Beth H.:                    Wow. That’s a lot of money.

Jason Browning:               Absolutely.

Mary Beth H.:                    Wow. That’s a lot of money. If you bought and your interest rate is in the fours, fives, I mean, gosh, by now I’m sure most of you have refinanced, but that would be a smart thing to do. If you have PMI on your house, or MIP if you did an FHA loan… That’s the same thing. It’s called mortgage insurance premium instead, but that would also be able to be removed.

Jason Browning:               That is correct. I offer a free analysis on that just to make sure it’s even worth your time. We can get a snapshot of what you’re at right now and then what it would be after the refinance to see if it’s worth it.

Mary Beth H.:                    That’s good to know. Yeah, before you go jump off the high board, you need to find out do the ends justify the means. If all you’re saving is say $50 a month, how long would it take you to reap the benefits of the cost of refinancing? I’m glad to know that you worked that out with them to know what’s a good financial move and what’s not. Well, If you think it’s time to refinance, then we need to make a phone call here and get a hold of Jason at Academy Mortgage. Of course, we’re on all social media. We go where you go and you can find us a, and thanks for listening.

Leave a Reply