Not Starting Over When Your Refinance

The election is over and if there is anything markets like it is certainty.  We finally have a little bit of that in the political world.  Despite a fed reduction in rates prior to the election the 6 weeks or so leading up to it were really volatile in the interest rate environment.   In September things seemed to be heading on a favorable track for the consumer and then shortly after the fed announced the 50 basis point decrease the market went wild and mostly up.  We seem to be back towards heading down again now. 

Some of those who purchased in the last couple years are staring at interest rates that start with a 6 or 7.  There is going to be a point where it makes sense for those people to look at refinancing that debt if there isn’t one already.  One the potential drawbacks with any refinance is most of the time it starts a new 30 year term for the borrower.   The payments at the very beginning of the term are weighted most heavily towards interest vs principal and traditionally it means starting over in terms of the 30 year clock despite having paid previously towards it on another mortgage. 

Fear not, we have the solution.  At Select One we offer customized terms for both purchases and refinances.  There is no additional cost with this and it doesn’t increase the rate.  This allows borrowers to decide how long they want their mortgage payments to be.  This is a neat feature when refinancing to not only allow for rate savings but also shorten the term if that is desired.  When digging into borrowing money the amortization term is every bit as important as the interest rate when one considers total interest paid over the life of a loan.

Have financial goals in life?  We all do.  This product allows people to decide when they want to plan to have their home paid off.   If you are 39 now and want to be mortgage free at age 60 we can write a 21 year mortgage for you.  If you bought 3 years ago and took out a 30 year mortgage we can make it a 27 year when you refinance.  

None of this stuff is exciting but if you peel back the layers of the onion and see how much in interest you can save by shortening the amortization term it might surprise you.