Home Edition August 2016
Low Mortgage Rates Boost Refinance Applications
Since Britain's vote last month to exit the European Union rattled financial markets, average long-term mortgage rates have dipped tantalizingly close to an all-time low of 3.31 percent set in November 2012. That's prompting a flurry of purchases and refinances as borrowers rush to take advantage.
The current average rate amounts to a savings of about $76 a month on a $200,000, 30-year, fixed-rate mortgage from a 4.09 percent loan two years ago. That may not sound like much, but over the life of the loan, that's $27,360 saved and about $27,379 in interest not paid to the lender.
Here are some things to consider when reviewing your refinance options:
Credit Score: To get the lowest interest rate, borrowers should have a clean credit report and a FICO credit score of 740 or higher. Scores below 680 will make it harder to qualify for lower rates. Consumers are entitled to a free credit report every 12 months from each of the credit bureaus: Experian, TransUnion and Equifax.
Shop Around: Get quotes from several companies and track the offers, including an estimate for closing costs and any extra fees, like loan points paid to lower the interest rate. Lenders may charge fees for the mortgage broker's services, credit reports, a home appraisal and title insurance.
Home Equity: Even borrowers who are underwater on their mortgage, or owe more than the home is worth, or those who have very little equity, may be able to refinance.
Type of Property: Own a vacation or second home? These types of properties are eligible for refinancing, but they're generally going to carry higher interest rates than owner-occupied homes.
Contact me today to learn more about opportunities that may exist for you.
Understanding Travel Insurance Cancellation Policies
Before you book your final trips for the summer, be sure you understand the insurance and cancellation policies that exist.
Your best bet for getting a refund no matter the reason for cancelling, is to buy an expensive type of insurance called "cancel for any reason" insurance when you book your trip. Otherwise, whether you get money back depends on the circumstances and policies of individual airlines, hotels and other vendors.
Standard insurance typically covers illness, injury, death in the family, natural disasters or other major events that prevent you from traveling, like terror attacks. It also provides coverage if you get sick or injured while traveling, covering medical treatment, reimbursements for unused prepaid trip costs and travel home.
Cancel-for-any-reason policies let you change your mind on a whim. These policies are more expensive: standard trip insurance costs about 5 percent of a trip, while cancel-for-any-reason policies can cost substantially more.
Standard insurance can be bought up to the day before departure, but cancel-for-any-reason insurance must be bought sooner. Reimbursement rates vary by policy, so don't expect 100 percent of your losses to be covered.
Airlines often charge hefty fees to change flights, but that can change in a crisis, especially if airports close or governments issue warnings.
Hotel chains and car rental companies often allow cancellations with no penalty until a day or two before arrival. But discount rates and package deals are sometimes nonrefundable, so check the terms. If you booked with a tour company or resort that has multiple locations, ask about receiving a credit for another location.
Booking website policies also vary. Expedia does not charge cancellation fees but cautions users that hotels and other providers may charge fees depending on their terms and deadlines. On Airbnb, hosts choose their cancellation policies, ranging from a full refund up to one day prior to arrival, to "strict" policies with just a 50 percent refund up until a week prior to arrival.
Be sure to consider your travel insurance options before booking vacations and heading out on your trips
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This letter is for information purposes only and is not an advertisement to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, 4131316 NMLS #237653