Mortgage Refinancing 101

Refinancing your home at the Lake of the Ozarks can be beneficial for reducing the length of the loan, lowering your monthly payment or improving your rate terms. Keep reading to learn the basics of a home refinance from your Lake of the Ozarks mortgage lender.

Mortgage Refinancing 

To "refinance" your home means to replace your current mortgage loan with a new one. Your needs as a homeowner years ago may not be the same as the needs you have today. Maybe mortgage rates are currently lower than when you first applied for your home loan. Maybe you improved your credit over the years and now you can qualify for a better rate than you did in the past. Maybe you are struggling to make your monthly mortgage payment and need to decrease that payment. Some of the main reasons people choose to refinance their home include: to obtain a lower interest rate, shorten their term in order to pay their home off more quickly or to use their equity to get money for home improvements, kids' college tuition costs, etc.

Types of Mortgage Refinances 

There are several different types of mortgage refinances: rate-and-term, cash-out and cash-in. The type you choose will depend on your unique situation and what your goals are with the refinance.

Rate-and-Term 
The most common type of mortgage refinance is a rate-and-term refinance. In this type of mortgage refinance, the only difference between your current loan and the new one will be the mortgage rate, the loan term or both. For example, you may want to refinance from a 30-year fixed rate mortgage to a 15-year fixed rate mortgage. With this type of loan, you are not allowed to get additional money in your pocket. Typically, you can only finance the current payoff amount of your existing loan, closing costs and prepaid items into the new loan.

Cash-Out
In a cash-out refinance, the loan amount of the new mortgage will exceed the original mortgage balance. Due to the fact that the homeowner only owes the original amount to the bank, the "extra" amount is paid to the homeowner at the closing. In the event of a debt consolidation refinance, that cash could be paid directly to the creditors that are being paid off. These mortgages represent more of a risk to a bank than a rate-and-term refinance and therefore can require more strict approval standards, such as a higher credit score, and can carry a higher interest rate than a rate-and-term refinance.

Cash-In 
A cash-in refinance is the opposite of a cash-out refinance. For this type of refinance, a homeowner pays cash to pay down the loan balance and reduce the amount owed to the bank. The most common reason for this type of refinance is to get access to lower mortgage rates that are only available at lower loan-to-value ratios. Another reason for this type of refinance is to cancel PMI (Private Mortgage Insurance), which is required until your LTV is 80% or lower.

If you're interested in learning more about the possibility of a Lake of the Ozarks home refinance, give us a call at 573-746-7211. As your mortgage professional at the Lake of the Ozarks, I'm committed to working with you every step of the way. I'll discuss your financing options, offer competitive interest rates and back it up with the first-class service you deserve!

For Lake area news, resources and tips on financial services, please 

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

Refinancing Your Home at the Lake of the Ozarks

Buying a brand new home isn't the only reason you would need a home loan at the Lake of the Ozarks. Today's blog from your Lake of the Ozarks mortgage lender discusses how refinancing your home works. Keep reading to find out if refinancing may be right for you.

What is Home Refinancing? 

Refinancing is when you get a new mortgage to replace the original one you had on your home. This is done in an effort to reduce the monthly payment amount, lower the interest rate or take cash out for larger purchases. In today's economic conditions, it can be difficult for some to make the monthly payments on their mortgage. Should you find yourself in a situation where you're struggling to make your mortgage payments each month, refinancing is something to consider.

How Does Refinancing Work? 

When refinancing a home at the Lake of the Ozarks, the first loan is actually paid off, allowing the second loan to be created. Therefore, there will be costs associated with creating a new loan. It's important to make sure that the benefits of refinancing will outweigh the associated costs. You will need to consider all of the closing costs, such as application fee, title insurance and title search fees, attorney review fees and points and fees incurred in loan origination. Run the numbers and see if refinancing makes sense for you. Talking to a mortgage professional at the Lake of the Ozarks and discussing your options will also help.

Advantages of Refinancing 

There are a variety of advantages to refinancing your home. The main advantage is being able to reduce your interest rate. Whether interest rates have dropped since you first got your mortgage or your credit score has improved allowing you to qualify for a better interest rate, refinancing might be a great option for you. A lower interest rate can have a huge impact on your monthly payments, potentially saving you hundreds of dollars each year. This brings us to the next advantage, the ability to reduce your monthly mortgage payment. Whether you took a pay decrease or just want to be able to set money aside in savings, a reduction in your monthly mortgage payment by refinancing could be a great solution.

If you're considering a Lake of the Ozarks home refinance, give Michael Lasson a call at 573-746-7211. As your mortgage lender at the Lake of the Ozarks, I'm committed to working with you every step of the way, from deciding if refinancing is right for you to closing the loan. I'll discuss your options, offer competitive interest rates and back it up with the first-class service you deserve!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

5 Home Refinance Triggers

While most people think about refinancing a home at the Lake of the Ozarks to get a better interest rate, lower their monthly payment or shorten the term of the loan, there are other factors that can trigger the idea of refinancing. Keep reading to learn more about some of these refinance triggers. If you're in any of these situations, talk to your Lake of the Ozarks mortgage lender about your options.

1. Experiencing a Divorce

In the event you and your spouse decide to divorce, and both names are on the mortgage, you'll either need to sell the home or refinance it. In certain situations, where you need to remove a name from the mortgage or title, a home refinance can be an appropriate vehicle to do so. Talk to your lender about the best options for you and your situation.

2. Recovering From a Low Credit Score

Even if interest rates haven't dropped since you first applied for your mortgage, you may still be able to get a better interest rate if your credit score has improved. If your original mortgage rate was based on a low credit score and you've been working to improve that score, you might talk to a mortgage professional at the Lake of the Ozarks about what rates you might qualify for in a refinance. 

3. The Ability to Discontinue Mortgage Insurance

With a low enough LTV (Loan-to-Value), you can refinance your loan to remove the private mortgage insurance that was required at the time you originally obtained the loan. If your home either increased in value or you've paid your loan down enough, a refinance might save you money via a lower interest rate and the absence of the insurance payment. 

4. The Need to Cash Out Some Equity

If you're in need of some cash flow, whether it's for renovations or to pay off other debt, you might consider refinancing your home. Renovating wisely can actually increase the value of your property, which is particularly important if you are considering selling your home in the near future. If you're wanting to consolidate debt, you likely won't find a personal loan with interest rates as low as your home loan rates. Talk to your lender to see if a cash-out refinance is an option for you. 

5. The Desire for Long-Term Savings

If you're planning to stay in your home for a long time, then a home refinance might be a great option for you. With a lower interest rate, you could save more money in the long run. However, if you're planning to sell and move soon, the upfront costs to refinance your mortgage might not be worth the investment. You won't have the home long enough to benefit from the interest savings.

If you're considering Lake of the Ozarks home refinancing, give us a call at 573-746-7211 to discuss your situation. As your mortgage lender at the Lake of the Ozarks, I'm committed to working with you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

6 Common Refinancing Mistakes

With interest rates still low, many homeowners are thinking about refinancing a home at the Lake of the Ozarks. While refinancing could possibly save you money in the long run, it's important to look at the big picture. Keep reading to learn about some of the most common refinancing mistakes you can make.

1. Not Taking Care of Your Credit

Your credit score is one of the biggest contributing factors in determining what interest rate you'll qualify for. Take a look at your credit report to make sure there aren't any errors. In addition, be sure to pay all your bills on time. You want to do everything you can to increase your credit score before going in to refinance your home loan at the Lake of the Ozarks. 

2. Opening New Credit Accounts and Increasing Debt

One way to hurt your credit score and your chances at a good mortgage interest rate, is to open up new lines of credit. Doing so can lead to delays in the mortgage approval process and could even cause you to get rejected. Not only does this cause a change in your debt-to-income ratio, but every time you open a new credit account, your credit score drops. 

3. Failing to Consider All Costs

While lowering your monthly payment or getting a better mortgage rate is your main goal when refinancing, it's important to consider all associated costs. Before jumping on what seems like a great deal, weigh the amount of time left on your current mortgage and the closing costs of the refinance. If you don't plan to stay in your house very long or you're close to paying it off, a refinance might not make sense financially. Be sure to look at the big picture.

4. Not Checking Your Property Value

Chances are, your home's value is not the same as it was when you first financed your house. Overestimating your property value is one of the easiest refinancing mistakes you can make. Talk to real estate agents in your area to see what homes similar to yours are going for these days. Having a realistic number in mind can help you avoid a costly financial mistake.

5. Financing Short-Term Expenses with a Long-Term Loan

With the rise in home prices, many homeowners are tapping into newfound equity to accomplish financial goals. While a cash-out refinance may seem like a great way to pay for that cruise you've been dreaming to take, it will cost you more for that trip. Before refinancing, think about the value you're getting. Homeowners may receive more value by investing in home improvements, a college education or a promising business venture. Make sure your refinance will yield good returns in the long-term. 

6. Refinancing Too Often

With interest rates near all-time lows, it can be tempting for homeowners to refinance. However, like mentioned above, there's more to think about than just the interest rate. Frequent refinancing extends the mortgage term again and again. Sometimes the lowest possible payment is a priority for a homeowner with limited cash flow. However, a financially stable borrower should focus on lifetime savings. One strategy would be to refinance with a shorter term. You can also make additional principle payments to avoid extending the repayment time frame.

Talk to your Lake of the Ozarks mortgage professional if you are considering a home refinance. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve. Together, we can decide if refinancing your mortgage at the Lake of the Ozarks is the right decision for you!

For Lake area news, resources and tips on financial services, please 

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(866) 397-0318

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.