• About
• Mortgage Lending
• Mortgage Calculators
• Loan Officers
• Apply for a Loan
• Locations

It's been a very crazy couple of months - for those who have taken advantage of the low rates - congrats!  For those who have not had the opportunity or ability, read on.  And as always, I am here to help you analyze your situation 24x7 - so feel free to reach out, or forward this to someone who might be able to benefit.

This month's newsletter will address the following:

1. what the heavy volume of refinance business means to you
2. the most common example of what my clients are doing today to take advantage
3. a loan program that is becoming very popular - and why

Section 1 - Last month (August) was a historical money for The Legacy Group.  We funded $167,000,000 in total loan volume - and just in the last 2 days of the month, we funded 110 loans for a total volume of $28,400,000.   What does this mean?  It means mostly everyone that can is taking advantage of the low rates.  Although this is a win win, it means that banks and investors are being pushed to the max with regards to their infrastructure and ability to handle the volume successfully.  And what I mean by that is being able to deliver on the rate they have promised, and in a timely manner.  Loans are going to take longer to fund, which will cost more to lock the loan for a longer period of time.  Months ago I would lock a loan for 25 days, today it's 40 days, and very soon it may be 55 days.  Simply put, when you lock for a longer ! period of time, it becomes more expensive.  So my advice as always is to examine this sooner or later.  Whether it's a refi or purchase, your timing is good.  Rates are very important but finding a lender who knows the market, studies underwriting guidelines, and just plain gets the job done is key.  Based on the volume we produce as a company, we simply have pricing that not many can touch, but more importantly we have the ability to fund your loans on time, and as promised, which is not typical for this industry right now.  Another way to put it - we have a system where we can place your loan in today - and I am confident we can do it quicker than most, and as competitive, without the typical big bank surprises or catches.

Section 2 - In August, I worked with clients who had loans only 3-4 months old.  I know it sounds crazy but that's how far rates have dropped.  A couple months ago I talked about the 'justification' of a refi - basically, when and IF it makes sense.  Most of us have taken advantage of the market in recent years so chances are your rate is fair, but not ideal, so in the last few weeks the bulk of my volume has revolved around structuring rates for clients with zero to minimal closing costs.  For example, if a client is currently at $500k on a 5% - 30 year fixed loan, their mortgage (excluding taxes/insurance) is $2684/month.  If they drop to 4.5% at zero costs - w/ the same loan amount, that payment drops to $2533/month - so about $150/month in savings.  There is also the interest saved over the course of the loan by financing your debt at a 1/2 pt. lower.  It's not always this ! simple but you get the idea.  If you're in your home for the long term, most of us simply prefer to time it where we hit the market at the bottom.  It's all about the cost of the loan, what you're gaining out of it from a monthly payment, and what you are saving in interest over the course of the loan.  Apart from $'s, there are also numerous reasons to refi such as getting out of an ARM or Interest Only loan into a long term secure 30 year fixed loan, or getting out of a 30 year into an ARM if your strategy in the home is short-term, or a program that I'll touch on in section 3 (below) - the 15 yr. fixed loan.  Then there's always the question of - if you wait, are you sure you'll be able to take advantage down the road?

Section 3 - With rates so low, all of a sudden the 15 yr. fixed loan is starting to look a lot more attractive.  There is a segment of homeowners who are looking to pay off their mortgage faster even if it means an increase in their monthly payment.  This  change is being prompted by the record low rates where we are seeing the 15yr. under 4%.  Something about a rate that starts with 3....

There has also been a shift in the way many are thinking about debt as it pertains to their home.  Many of us have shifted from being willing to leverage assets to being debt adverse and are motivated to payoff their homes sooner.  The 15yr. acts as a forced savings plan in many ways, but can be a big payment jolt for many.  The 15yr. isn't for everyone but if you had the financial means, I'd strongly consider it IF you are motivated to payoff your home soon.  I'd also recommend you have a years worth of payments in savings before you consider this program.  Simply put, lower rate = significant interest savings over the life of the loan.  For example, if you take a $417k loan at 4.5% - amortized over 30 years, this would be around $343k in total interest over the course of the loan.  On a 15 year fixed at 3.875% - this would be roughly $134k in total interest - so a savings of around $209k in interest.  Pretty significant, and if doable, worth looking into based on what's available today.

Happy September - I hope to talk to you soon!