Things to consider when refinancing your mortgage
Mortgage repayment is one of the most pressing issues a homeowner has to deal with while preparing his budgets. Consumers seek low monthly pay-out scheme so that it is less straining on their purse. In times of economic misfortunes like this the mortgage rates have plunged to an all time low, experienced since decades. Therefore, it is quite obvious that homeowners are rushing to the doors of the mortgage lenders to obtain a refinance on their existing mortgage in the hopes of saving some hard earned money.
But before taking onto the refinance bandwagon, it is very important to analyze one’s financial health so that there is nothing to regret after refinancing. So, for that reason here are few points that should be looked into before opting for a refinance:
Interest Rate – Mortgage-backed securities bought by the Federal Reserve have sent the mortgage rates crashing down. Now is the lucrative time to opt for a refinance. This way some money will be saved.
Duration – Refinance is profitable for those people who intend to stay in their current or principle residence for a longer period of time. This is because; loan amount depends on the duration of an individual’s stay on that property. The longer the stay is, the lower will be the loan amount.
Home Equity – There have been rise in the number of homeowners being “underwater”. This implies that these people have an outstanding mortgage loan that is more than the present market value of their principal residence. In such cases, getting a refinance is impossible unless the difference between the home equity and the mortgage loan amount is negated.
Costs – Many a times it’s been found out that there is a prepayment fine for paying off the existing mortgage with the refinance loan. Moreover, other costs such as the loan origination fee, attorney fee, appraiser fee, application fee and so on should also be taken into consideration before applying for refinance. These sorts of fees almost amount to 2-3% of the loan amount. Therefore, the calculation will help in deciding whether or not refinance is a smart decision.
FICO score – Before approving a refinance loan, banks look for the applicant’s credit or FICO score to know the person’s credit worthiness. Banks believe that consumers with a FICO score of 740 are the most suitable candidate to avail their best rate. The reason being so is that banks rely on such people after knowing their impressive credit score. It is quite unlikely that these people will default on their monthly repayments.
Every bank is coaxing the general consumers in to order sell their products before anyone else makes the cut. This is a good sign as there are several alternatives available to choose from. Therefore, it is a wise decision to do some prior market research and obtain few mortgage refinance quotes so as to select the best refinance loan from the available options.
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Vancouver West real estate > detached homes
Detached home sales in Vancouver Westside for the month of March, 2012 at 152 units was 15% lower than the previous month sales of 177 units, and 46% lower than a year ago. The total active listings at the end of the month around 850 units and average past 3 months demand at 138 units pointed to just over 6 months supply of homes. You can view detached homes for sale in Vancouver west using the link here.
The supply of homes showed a slight increase as sales slowed down. Overall, the market for detached homes in Vancouver West is in balance. The cooling off in the market is a relief to home buyers. Home prices in Vancouver West could have peaked a few months back.
The slowing down in home buying activities in Vancouver West are now inline with the neighboring municipalities like Richmond, Vancouver East and Burnaby. The markets in these other cities are now more tampered and buyers are taking more time to check out homes for sale on the market. The median price dropped slightly, but is is staying above the $2.00 million level.
Market outlook for Vancouver West detached home
The Vancouver West detached home market is favoured by Asian buyers, and the underlying support for homes there depends on these buyers. The uncertainties on the economic fronts in the US, Europe and China are not having a significant dampening effect on home prices in Vancouver west.
You can view detached homes for sale in Vancouver west using the link here.
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Greater Vancouver Home Listings Rise in March but Sales Drop
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,874 on the Multiple Listing Service® (MLS®) in March 2012. This represents a 12.9 per cent increase compared to the 2,545 sales recorded in February 2012, a decline of 29.6 per cent compared to the 4,080 sales in March 2011 and an 8.4 per cent decline compared to the 3,137 home sales in March 2010.
March sales in Greater Vancouver were the second lowest total for the month in the region since 2002 and were 16.8 per cent below the 10-year sales average for the month.
“Home sellers have been more active than buyers the first few months of the year, but we continue to see a relative balance in the total supply of homes for sale and current demand in the marketplace,” Eugen Klein, REBGV president said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,843 in March 2012. This represents a 5.2 per cent increase compared to February when 5,552 homes were listed and a 14 per cent decline compared to March 2011 when 6,797 homes were listed for sale on the region’s MLS®.
Last month’s new listing total was 4.5 per cent above the 10-year average for listings in Greater Vancouver for March.
At 15,236, the total number of residential property listings on the MLS® increased 8.4 per cent in March compared to last month and increased 16 per cent from this time last year.
“The total number of properties for sale in Greater Vancouver has increased each month since December, which means there’s more selection to choose from as we enter what’s traditionally the busiest season of the year in our market,” Klein said.
The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $679,000, up 5.3 per cent compared to March 2011 and an increase of 1.1 per cent compared to February 2012. The benchmark price for all residential properties in the Lower Mainland is $607,700, an increase of 4.8 per cent compared to March 2011.
Sales of detached properties on the MLS® in March 2012 reached 1,183, a decline of 34.1 per cent from the 1,795 detached sales recorded in March 2011, and an 11.5 per cent decrease from the 1,336 units sold in March 2010. The benchmark price for detached properties increased 9.2 per cent from March 2011 to $1,056,400.
Sales of apartment properties reached 1,191 in March 2012, a decline of 26.6 per cent compared to the 1,622 sales in March 2011, and a decrease of 4.9 per cent compared to the 1,252 sales in March 2010.The benchmark price of an apartment property increased 2.2 per cent from March 2011 to $375,100.
Townhome property sales in March 2012 totalled 500, a decline of 24.6 per cent compared to the 663 sales in March 2011, and an 8.9 per cent decrease from the 549 townhome properties sold in March 2010. The benchmark price of a townhome unit increased 0.9 per cent between March 2011 and 2012 to $480,900.
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