6 Reasons to Refinance in 2020

When done correctly, refinancing can save you a lot of money and could be the best financial step for you to take. Have you ever considered refinancing your home? If you have not considered it, 2020 may just be the year that you need to think about it, and see if it is the right option for you! Your Lake of the Ozarks mortgage lender is here to help, so we have 6 reasons why refinancing may be the best step for you.

#1. It Can Lower Your Interest Rate

Did you know that if you can lower your interest rate by at least 1% (or 0.5% on higher loan amounts), you should consider refinancing? Interest rates are incredibly low right now, and the chances that you can get a better rate by refinancing now are much better than in previous years. This is a huge asset because you could end up saving a lot of money in interest paid throughout your loan.

#2. Switch Your Loan Type

There are many different loan types available for homes, some are better for certain people than others. If you currently have an adjustable-rate mortgage (ARM), you may want to switch to a fixed-rate mortgage (FRM). This can allow you to lock in a low rate for a long time! It might also be feasible to drop from a 30-year mortgage to a 20 or 15 year. With the lower rates, you could have close to the same payment you currently have but shorten the term of the loan. This is something you can discuss with your mortgage lender at the Lake of the Ozarks!

#3. Be Aware of Balloon Payments

Some mortgages have a large payment due at the end of the loan term - usually, 5-7 years, called a “balloon payment.” This type of mortgage is a short-term loan that is set up like a long-term loan for the first few years. You may need to refinance your loan to avoid paying this large expense.

#4. Stop Paying Private Mortgage Insurance

When more than 80% of the home's sale price is borrowed, sometimes the borrower is required to purchase private mortgage insurance (PMI). If the home's value has increased, you can use this amount to refinance and stop paying that PMI.

#5. Cash Out Home Equity

Home equity is often used as a way to finance a remodeling project, college tuition, car purchase or a vacation. If your home's value has increased, you can refinance to cash out that extra amount. You would actually be refinancing your mortgage for more than you currently owe on it and then pocketing the difference.

#6. Consolidate Debts

If you have a lot of high-interest debts, you may be able to save money by consolidating those debts into a mortgage. Auto loans, credit cards, second mortgages, and other debts can all be included in your refinance.

Do you have more questions about refinancing a Lake of the Ozarks home? Team Lasson would be glad to answer your questions! You can start by filling out an application on our website (www.YourLakeLoan.com) so that we have an idea of your financial position. We look forward to helping you decide if refinancing is the right choice for you!

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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.

10 Mortgage Terms Defined

Like any industry, there will be a specific set of terms and abbreviations that are used to quickly communicate something important. If you are not a part of the “club,” though, it can seem hard to keep up. The Lasson Team doesn’t expect you to learn the mortgage lingo - so we take time to explain everything to you. We want you to understand exactly what your vacation home mortgage at Lake of the Ozarks will mean and how it will affect your finances afterward. If you like to learn about new terms - we’ve explained a few of them here so you can show off at our next appointment together!

ARM (Adjustable Rate Mortgage)

This is a mortgage in which the interest rate is adjusted up or down. The time frame that it is adjusted by is based on a pre-selected index. ARM products have interest rates that may increase after loan consummation.

Amortization

This is the repayment of debt with periodic payments that include both the principle and the interest. The loan is to be paid off at the end of a fixed period of time.

DTI (Debt-to-income ratio)

This ratio is explained as a percentage, and it explains what a borrower’s monthly payments will be on long-term debts divided by his or her gross monthly income.

Escrow

This may also be called “impounds” in some areas. It is the money that is collected by a lender as part of the monthly mortgage payment. It is then used for the purpose of paying a homeowner’s real estate taxes and insurance obligations.

Loan Estimate

This summarizes the terms of your loan and the estimated costs and is issued after your loan application. The processing of your loan starts when you submit the Intent to Proceed form that is issued along with the loan estimate.

Closing Disclosure

This provides the actual costs and terms of your loan. You will receive it at least three business days before closing.

LTV (Loan to value ratio)

The ratio is expressed as a percentage, and it results from dividing the amount being borrowed by the appraised value or selling price of the house.

PITI (Principal, Interest, Taxes & Insurance)

This is pretty self-explanatory. The principal, interest, real estate taxes, homeowner’s hazard insurance, and if applicable, private mortgage insurance or flood insurance. This is also known as your monthly housing expense.

PMI (Private Mortgage Insurance)

PMI is an insurance policy that allows a mortgage lender to recover part of its financial losses if a borrower defaults on a loan.

Underwriting

The underwriting department is responsible for approving mortgage loan applications. The underwriting procedure includes evaluating and verifying the information provided on the applications and supporting documentation to determine if the client has the capacity to repay the mortgage loan.

Ready to Buy a Home at the Lake of the Ozarks?

Now that you understand some of the lingo, it’s time to get you pre-approved at the Lake of the Ozarks! Buying a vacation home at Lake of the Ozarks is a great way to invest some money, but also enjoy it in the process. What may start as purely investment could become the best money you ever spent. If you are ready to join the thousands of homeowners at Lake of the Ozarks, we would like to help. Visit our website, or give us a call at (573) 746-7211 to learn more about home buying at the Lake of the Ozarks.


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.

3 Considerations for an Adjustable Rate Mortgage

When choosing to finance a home at the Lake of the Ozarks, you have options. One decision you'll need to make is whether you want a fixed rate mortgage or an adjustable rate mortgage. With a fixed rate mortgage, your interest rate stays the same throughout the life of the loan. However, with an adjustable rate mortgage, you may be able to secure an even lower rate in the beginning; after that introductory period, the interest rate then moves with the market. Keep reading to learn more about adjustable rate mortgages and what you should consider about them from your Lake of the Ozarks mortgage lender.

1. Consider the Current Spread. 

The "spread" is the difference between the adjustable rate and the fixed rate. This difference is your incentive for choosing an adjustable rate mortgage over a fixed one. The bigger the spread, the more attractive an adjustable rate mortgage will look. The "teaser period" is the duration that the loan will stay at that introductory rate before it shifts to the market rate, which could be higher or lower than what you were previously paying. That's the risk you take when choosing an adjustable rate mortgage. In general, the shorter your teaser period, the better introductory rate you can get. The savings available with an adjustable rate mortgage can be substantial during the teaser period. However, after the mortgage enters the adjustment period, the savings can be reduced or even eliminated.

2. Consider Your Time Frame. 

Another important consideration when choosing between an adjustable rate mortgage or a fixed mortgage is how long you plan to stay in the home. If you feel you'll stay in your home for the rest of your life (past the teaser period), then you might be better off sticking with a fixed rate mortgage. However, if you think you'll only stay in this house for a few years before selling or refinancing, then an adjustable rate mortgage may be the better option. According the the National Association of REALTORS, homeowners typically own property for close to 7 years before selling. Older homeowners typically keep a home longer, while first-time home buyers will often keep a home for a shorter period of time. There's no sense in paying the interest rate for a 30-year mortgage if you're only planning to stay in the home for 5 years or less. See what kind of savings you could get with an adjustable rate mortgage if this is the case.

3. Consider the Loan Size. 

Are you purchasing a home that requires a "Jumbo Loan"? A jumbo loan is a mortgage loan which exceeds the loan size limits for an area. When borrowing more than your area's loan limit allows, the fixed rate pricing tends to deteriorate and your best choice could be an adjustable rate mortgage. The savings you can get with an adjustable rate mortgage on a jumbo loan can be huge. It's not uncommon to see the adjustable rate on a jumbo mortgage beat the fixed rate by 250 basis points or more. That's a pretty big incentive to choose an adjustable
rate over a fixed rate mortgage.

With mortgage rates remaining low, the savings of an adjustable rate loan are even better. If you're considering a home loan at the Lake of the Ozarks, give us a call at 573-746-7211 to discuss your options. As your mortgage lender at the Lake of the Ozarks, I'm here to work with you every step of the way. When it comes to your financing needs, 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.

Adjustable Rate Mortgages Explained

When it comes to choosing the right loan for your new home at the Lake of the Ozarks, there are many different options. From government loans to privately funded, fixed-rate to adjustable rate, you have a lot of things to consider. Which one is right for you? Read on about adjustable rate mortgages and talk to your mortgage lender at the Lake of the Ozarks to see what options you have for your specific situation.

What is an Adjustable Rate Mortgage? 

An adjustable rate mortgage (ARM) is when the rate of interest is adjusted periodically to reflect market conditions. Your monthly payments can then move up and down as those interest rates fluctuate. Most ARMs have an initial fixed-rate period, followed by a longer period where the rate changes at preset intervals. The interest rates charged during the initial period are typically much lower compared to fixed-rate mortgages.

When Does it Make Sense for an Adjustable Rate? 

Most homeowners that choose an adjustable rate mortgage base their decision on the fact that the initial interest rate is lower than a comparable fixed-rate mortgage. This can make your monthly payments on the same house much lower to start with. Once the fixed-rate period ends, there's the possibility of your interest rate going even lower, so your monthly payments could decrease. However, it could go the other way too and your monthly payments could increase. Interest rates are unpredictable, so you can't predict what you're payments are going to be after your initial fixed-rate period is up. If the home you're purchasing is simply a short-term investment or if you don't plan on owning it for longer than 5 years, an adjustable rate mortgage makes more sense than a fixed-rate.

Types of Adjustable Rate Mortgages

Adjustable rate mortgages come in many different forms, ranging from 1-month ARMs to 10-year ARMs. Obviously each comes with its own risks, so be careful when comparing the different Lake of the Ozarks mortgage options:

• 1-month ARM: First adjustment after one month, then adjusts monthly
• 6-month ARM: First adjustment after six months, then adjusts every six months
• 1-year ARM: First adjustment after one year, then adjusts annually
• 3/1 ARM: First adjustment after three years, then adjusts annually
• 5/1 ARM: First adjustment after five years, then adjusts annually
• 5/5 ARM: First adjustment after five years, then adjusts every five years
• 5/6 ARM: First adjustment after five years, then adjusts every six months
• 7/1 ARM: First adjustment after seven years, then adjusts annually
• 10/1 ARM: First adjustment after 10 years, then adjusts annually
• 15/15 ARM: First and only adjustment after 15 years

Talk to your Lake of the Ozarks mortgage lender today to see if an adjustable rate mortgage is right for you! We'll discuss your specific situation, your plans for the house and how much you can afford in a payment. When it comes to your financing needs, I'm here to help you with the details every step of the way! Give me a call at 573-746-7211 to discuss your options for a home loan at the Lake of the Ozarks!

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

Sr. Residential Mortgage Lender

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049

Direct:  (573) 746-7211

Cell: (573) 216-7258

Fax:(573) 693-9141

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.