Is it time to refinance and give yourself a raise
Like most people, you probably want to make more money next year, but in this economy you are just happy to have a job. How about giving yourself a raise–a tax-free one at that?
If you are a qualified homeowner, there has never been a better time to refinance your mortgage. You may even be able to trade in your old loan for a new loan even if you don’t have equity in your house. A homeowner with a $275,000 mortgage could save $336 in principal and interest payments each month by trading a 6%, 30-year mortgage for a 4%, 30-year loan. Unlike getting a raise, that extra cash in your pocket isn’t taxed.
If you have good credit and work history, refinancing can be easier than you think. It might only eat up an hour or so of your time, once you get all of the required documents to a lender. A good mortgage broker or banker can tell you how long it will take to payback the refinancing fees and if you plan to spend at least that much time in your home, refinancing is a no-brainer.
That is what Lisa, of Arvada, is doing. She has eight years left on her 15-year mortgage, but wants to cut her monthly expenses. In January, she is scheduled to refinance into a new, 3.25 percent, 15-year mortgage. She is rolling her first-mortgage, a home-equity line of credit and some credit-card debt into the loan, saving her a total of $470 a month. “If I stay in my home I will still be able to pay it off before I retire,” Lisa said.
Refinancing also is a good deal for investment properties. A couple of months ago, Steve, a dental technician in Denver, traded his 30-year-fixed-rate for a 4.25%, 15-year mortgage on a luxury condo he and his wife bought at an auction for $85,000. “We were thrilled to get the 4.25% rate, even though rates have just kept going down. It’s crazy,” said Steve, who is entering dental school next year. “Our payments only went up $70 a month with the 15-year mortgage and we still have positive cash flow. By the time I get out of dental school, our condo will be about a third paid off.” Steve said that his only regret is that he doesn’t have the money to take advantage of low real estate prices and mortgage rates near historic lows. However, if you think refinancing makes sense for you, don’t wait.
Dave Stevens, the former FHA commissioner and now the President and CEO of the Mortgage Bankers Association, recently spoke in Boulder and said that he doesn’t think these low rates will be around as long as many think. Stevens said that it wouldn’t take much good news, such as an improvement in the U.S. economy or a resolution of the European debt crisis, to send rates higher.
So give yourself a gift that keeps on giving and refinance.
November Market Movers:
Forecast for Colorado’s economy: Slow and steady. To read the entire article:
Denver-area home inventory falls by 30 percent, making it a good time to put a well-priced home on the market. To read the entire article: http://insiderealestatenews.com/2011/12/home-inventory-plunges-30/
The good news is the $2.3 million condo sale was one of the biggest deals of the year in downtown Denver. The bad news is the unit sold for a third less than the asking price. To read the entire article: http://insiderealestatenews.com/2011/11/riverfront-penthouse-fetches-2-3-million/
Finally, there are signs the new home market in the Denver market is starting to show life. The number of permits pulled in the first eight months of the year for new home construction is up slightly, according to the latest report by the HBA of metro Denver. To read the entire article:
Case-Shiller ranks Denver as the fifth best performing market at the end of the third quarter. Denver also showed the lowest year-over-year decline of 2011.To read the entire article: http://insiderealestatenews.com/2011/11/case-shiller-denver-no-5-3/
The market for rental homes remains tight in the Denver area. The overall vacancy rate is a low 3.5 percent. To read the entire article: http://insiderealestatenews.com/2011/11/home-rental-vacancies-at-3-4/
The national housing market is expected to recover in 2012, according to Money Magazine. Going forward, smaller will be better, with many people gravitating to smaller homes than in past year, the magazine predicts. To read the entire article: http://money.cnn.com/2011/11/11/pf/make_money_2012_housing.moneymag/index.htm
Want to refinance your mortgage, but you haven’t been able to because you have no equity in your home? Under new rules under a federal program, you may be able to take advantage of historically low rates. To read the entire article: http://rismedia.com/2011-11-16/mortgage-refinancing-program-undergoes-changes/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Rismedia+%28RISMedia+Real+Estate+News%29
Denver employment in the first nine months of the year is up 0.4 percent from the same period in 2010, while the unemployment rate fell to 7.6 percent in September. To read the entire article: http://www.metrodenver.org/metro-denver-economy/monthly-summary
If a 30-year-fixed rate mortgage is not low enough for you – or you don’t plan to spend much three decades in your home – ARMs are making a comeback, CNNMoney reports. To read the entire article: http://money.cnn.com/2011/02/14/real_estate/adjustable_rate_mortgages_rise/index.htm
Looking for an alternative investment to stocks and are considering real estate? One area you may have overlooked is investing in parking lots. Some consider it a recession-proof investment. To read the entire article: http://www.cnbc.com/id/44929808
Colorado Unemployment Drops to 8.1%; Jobs up 8,800: Colorado’s unemployment rate dropped again in October, to 8.1 percent, the lowest rate in more than 2-1/2 years, as the state added 8,800 nonfarm payroll jobs, the highest monthly gain since early 2007, the Colorado Department of Labor and Employment reported Tuesday. read more here
Colorado Small-Business Jobs up 0.5% in November: Employment by Colorado small businesses grew 0.5 percent in November from the previous month, according to a report November 29th from Intuit Inc. read more here
Forbes Rates Colorado 5th-Best State for Business: Colorado ranks as the nation’s fifth-best state for business and careers in the latest annual report by Forbes, posted Tuesday. read more here
Foreclosures Drop in Denver Metro Area: Foreclosure filings and sales continue to drop in the Denver metro area, including Boulder and Broomfield counties, according to the latest report from the Colorado Division of Housing. read more here
Existing Home Sales Edge Higher in October: Homebuyers scooped up more previously owned homes in October, slowly putting a dent in the huge inventory on the market, an industry report showed Monday. Sales of existing homes rose 1.4% last month to an annual rate of 4.97 million homes, up from a downwardly revised 4.90 million homes in September, the National Association of Realtors reported November 21st. read more here
Owning a Home is Less Expensive Than Renting: Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities. read more here
Noble Energy Joins Anadarko in Plans to Spend Billions in Niobrara, Colorado: Anadarko Petroleum Corp. isn’t the only Texas oil company planning to spend billions of dollars on Colorado’s Niobrara oil field in the next few years – Noble Energy Inc. said November 16th it also plans to invest heavily in the play. read more here
DaVita to Open Research, Call Centers in Denver Area: DaVita Inc. will open a new research center and call center in the Denver area, bringing 200 jobs to the region, the company announced November 17th. read more here
Rockies Roll into Grand Junction: Since 1958, Suplizio Field in Grand Junction, Colo., has served as the home of the Junior College World Series. In 2012, the venerable facility will host Minor League Baseball for the first time. The Grand Junction Rockies, Rookie-level affiliate of the Colorado Rockies, were formally introduced at a press conference November 15th. read more here