Welcome to my monthly newsletter about all things James Island!
With historically low interest rates, many are thinking about whether now is the time to refinance. I asked a local loan officer what James Islanders should keep in mind when deciding whether to refinance.
To Refinance or Not to Refinance?
It's a simple equation: When the numbers make sense. Here are two things to keep in mind when you are considering refinancing:
1. Loan officers get paid 100% commission based on your loan amount. Some loan officers will encourage you to refinance for the commission or try to talk you into raising your loan amount so they will get paid more. Work with someone you trust.
2. Before you think about doing anything, you need to know how long you plan on staying in your home. A typical refinance doesn't start saving you money until you are 1.5 - 2 years into it. So, if you sell within that time frame, you didn't actually save money.
Refinance when you can:
Save 1% on your interest rate. This should put your break even point (the point where the closing costs are paid with savings per month) within 2 years of closing.
Consolidate significant debt, (using your home’s equity) by taking advantage of lower interest rates and lowering your monthly expenses.
Convert your FHA loan to a Conventional loan.
Secure an adjustable rate mortgage with a fixed rate mortgage at a lower rate.
Shorten your loan terms (30yr into a 15yr).
Do NOT refinance when:
The numbers don’t make sense. A lower interest rate doesn’t always add up to savings. Closing costs are typically between $3,000 - 4,000. If your monthly savings are not enough to cover these costs within a couple of years, stay away. (How to calculate your break even point: closing costs/monthly savings/12=the number of years it takes before you start seeing your savings)
Things to be aware of:
Never buy down your rate, it doesn’t make sense. If it cost you $3,000 to save .25% on an interest rate but that only saves you $40.00/month. It takes you 6.25 years just to pay for the buy down.
Origination charges. Similar to above, some banks/credit unions charge a 1% origination fee. If your fees are high, your refinance will never pay for itself. Do the math.
Your mortgage is your biggest investment. If used correctly it can be a tool to help you grow your financial portfolio. If used incorrectly, it can cost you thousands of dollars. Do yourself a favor and ask the right questions.
CCSD Classes Begin
James Island Made Product
You may have heard about the Korean condiment, kimchi? Well, James Island has it's own version. Get yourself some Kenchi, a delicious product made on James Island and by James Island resident, Ken Jaimes. Passionate foodie and trained chef, Ken makes 5 varieties of fermented products in a commercial kitchen off Folly Road. Traditional Korean kimchi is made with seafood. Ken's version is vegan, including a refreshing combination of ginger, heat, and vegetable umami. Pick yourself up some at the Whole Foods on 17, Queen Street Grocery, the Veggie Bin, Bert's Market & Stono Market. Also, Verde has Kenchi as an option for your salad topping. It makes a delicious addition to anything especially eggs, sandwiches, and cheese plates. Learn more at www.kenchiferments.com
"Let me start by saying we are not first time buyers or sellers. Katie acted as a dual agent for a home we purchased- and I never thought I would use a dual agent. That said, Katie was a dream to work with! She was an absolute professional and incredibly trustworthy. I wouldn’t have entertained the thought of dual agent otherwise. Katie negotiated a very fair contract for both parties and handled every detail with ease for us as well as the seller. She even introduced us to a local lender that got us the loan we wanted and was able to bring down our closing costs considerably- without having to jump through hoops during escrow like some of the national lenders make you. Having done this several times before, I really felt like I had a solid plan in place for our purchase, but working with Katie took everything to the next level. I would highly recommend using her as a buyer OR a seller, she will without a doubt make your life easier during a normally stressful process. I hope we never decide to leave this house, but if we ever do, Katie will be my first call."
- Belinda Hare
RECENTLY CLOSED SALES IN JAMES ISLAND
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