If you are planning on purchasing a home, it’s important to understand the difference between annual percentage rate (APR) and annual percentage yield (APY). These two items differ enough in how they work that they can significantly affect how much you pay each month in interest. [Read more…]
If you are planning on purchasing a home, you are most likely going to be taking out a home mortgage. Since your monthly mortgage payment consists of more than just your Kansas City mortgage rate, it’s important to understand the other factors that make up your overall payment, or P.I.T.I.
P.I.T.I is short for:
You want to refinance your Kansas City mortgage rate, but also need some extra cash for things like home improvements. Rather than get a home equity loan, you could instead opt for a cash-out refinance.
What is Cash-Out Refinancing?
A cash-out refinance is an alternative to a home equity loan, as you are not taking out a second mortgage. Instead, you are refinancing your mortgage for more than what you owe, then pocket the difference to be used at your own discretion. It is essentially a new first mortgage. [Read more…]
If you are considering refinancing your current home loan to lower your Kansas City mortgage rate, you should explore the option of streamlining. Streamlining was created to speed up the home refinancing process with less paperwork and underwriting required.
Just like any other financing decision, there are pros and cons to streamlining your refinance. Each loan program has different guidelines and rules for handling streamline refinances. Just remember that some loans do not have the option of streamlining. If refinancing will not lower your Kansas City mortgage rate significantly, then it won’t be worth the effort, time, and money spent on the process.
Drawbacks to Streamlining
Government agencies such as the FHA do not allow borrowers to take cash out when using a streamline refinance. Therefore if you need to take cash out for renovations or other projects, the streamline method is not for you. Borrowers are restricted to only altering the rate or terms of their mortgage, and are unable to draw on the equity in their home. [Read more…]
Do you want to lower your Kansas City mortgage rate by paying points, but are not sure exactly what it does or what it will mean for you? By paying points, you are essentially “buying down” the rate of your mortgage. In other words, you are paying part of the interest upfront as a one-time fee in exchange for a lower interest rate. Each individual point is equal to one percent of the total amount mortgaged. Whether or not you should pay points depends on your unique situation.
Your Current Loan Purchasing Situation
There are many factors you have to take into account before paying points, such as:
- How long do you plan to stay in your home?
- Do you have the money to pay for the points?
- What is the housing market like?
With Kansas City mortgage rates so low at the moment, you may be asking yourself if you should refinance your jumbo loan. Refinancing a jumbo loan is a good idea if you plan to stay in your house for many years and want to reduce your interest rate.
Although the requirements for jumbo mortgages are different, the general process for refinancing is the same as it would be for a conventional refinance. There are a few factors you should consider before refinancing your jumbo mortgage:
- Your credit score
- When you will be selling your home
- Why you want to refinance
How Healthy is Your Credit Score?
Before you can even think about refinancing your jumbo loan, you must know the condition of your credit. Much like applying for a loan, your credit history and income will be evaluated when you refinance. Since these types of loans are outside the conforming loan limit, approval and underwriting guidelines are more stringent. [Read more…]
Homeowners who decided on an interest-only mortgage no doubt are aware of the risks involved once the interest-only period expires. One common issue interest-only borrowers suffer from is mortgage rate whiplash. The sudden increase in your mortgage rate can be difficult to accommodate in your day-to-day lifestyle. Unfortunately, simply renewing the interest-only period is usually not an option. However, there are three good ways to maintain Kansas City mortgage rates for an interest-only home loan:
- Refinance your home loan before the interest-only period expires
- Pay the mortgage principal whenever you can
- Invest the extra cash you save during the interest-only period
Refinancing Your Home Loan
Like other home loans, interest-only mortgages can be refinanced to attain lower Kansas City mortgage rates. However, be sure to check whether there is a penalty for refinancing. Usually if your refinance in three years or less, there will be no penalty. [Read more…]
When applying for a mortgage, a borrower’s primary concern is the mortgage rate. Locking in a low interest rate is one of the most important aspects of a mortgage since it greatly influences the size of your monthly payments. On a large loan like a mortgage, just one percentage point can add up to a significant amount of money.
There are 3 main determining factors of Kansas City mortgage rates:
- Your credit score
- Income and expenses
- Employment history
Credit scores have a direct impact of Kansas City mortgage rates. It is a measure of your ability and willingness to pay your debts on time. The higher your score is, the lower your mortgage rate will likely be. A credit report gives lenders an accurate picture of your credit history and enables them to offer program options that fit your needs. Lenders generally prefer to work with borrowers who have: [Read more…]
A home equity loan, or second mortgage loan, can cover many financial needs such as consolidating debt, home improvement, college tuition, or big ticket items like cars. However, Kansas City home equity loans differ from first mortgages, most noticeably in their mortgage rates.
Home Equity Loans Have Higher Rates
Kansas City mortgage rates are often determined by the level of risk. If you have a first mortgage and a home equity loan and foreclose on your loans, you can only pay your home equity loan after you pay your first mortgage. This lack of priority puts the home equity loan lender at higher risk, causing Kansas City mortgage rates to be higher for home equity loans than for first mortgages. [Read more…]
Kansas City mortgage rates are often confusing to new homebuyers and existing homeowners. When a lender offers you a rate, the figure is largely determined by:
Luckily, Kansas City mortgage rates have continued to remain relatively low over the last few years. This is good news for any buyer still seeking a home loan or any homeowners who have yet to refinance. If you fit either of these categories, you will have two types of Kansas City mortgage rates to choose from: fixed rates and adjustable rates. [Read more…]