Cash-In Refinance. Nothin' New. Nothin' Revolutionary.

By
Real Estate Mortgage Broker with www.genemundt.com NMLS #216987

 

 

Cash in Refinance.  Nothin' New.  Nothin' Revolutionary. 

By Gene Mundt, Professional Mortgage Banker  -  Chicago Bancorp

Gene Mundt Chicago Bancorp Bag of Cash pic - Cash In Refinance

     

     The concept of bringing "Cash In" to Closings of a Refinance is nothing new or revolutionary ... but it HAS become more common these days.            

     Why?       

     Home Values have declined in most U.S. housing market regions.  Yields on stocks, bonds, and other investments are dwindling ... and Mortgage Rates are hovering at, or under 5%.  (This last statement should be making those Americans looking to Buy a Home or Refinance salivate).       

     If any of the aforementioned scenarios apply to you as a Homeowner, you might presently be pondering "Cashing In" those investments that are yielding you a miserable rate of return and then utilizing those dollars to "Buy Down" your Mortgage Interest Rate, 1% or more.       

     This is a plan of action you might want to consider, especially if "Buying Down" the Interest Rate is the deciding factor in making a Refinance of your Mortgage possible.         

      A "Buy Down" can prove beneficial to a homeowner in the following ways:  

  • By reducing the Mortgage Balance to qualify at a certain LTV (Loan-to-Value )
  • To qualify for your Mortgage at a lower DTI (Debt-to-Income Ratio) 
  • To eliminate costly Mortgage Insurance, while also lowering the Interest Rate 
  • To reduce the Principal Balance of your Mortgage in conjunction with reducing the Loan Term (thusly keeping the new monthly Mortgage Payment comparable to the previous mortgage payment, but greatly reducing long-term interest costs
  • To fit into certain LTV (Loan-to-Value) "windows" on first and second (Combined LTV) Mortgage scenarios.

      There is no across-the-board right answer to these above-mentioned scenarios.  As I've written many times previously in my posts, today's Mortgage Processing and Mortgage Loan is more personalized than ever before.       

      As each borrower's set of financial situations are different ... each situation must be judged on its own merit.  Each decision must be based on the financial scenario and standing of the individual homeowner in question.    

     My suggestion or recommendation would be for the homeowner to consult their Income Tax Advisor and their trusted Mortgage Professional both, prior to proceeding with this type of Refinance.        

     Why?  

Gene Mundt Chicago Bancorp Mortgage Appt. pic

     My fear for any Homeowner with capital to invest is this ... How liquid is their money paid into reducing their mortgage?  How liquid is it versus having the money in a Money Market Account?  Versus a Certificate of Deposit?  Versus a Bond Fund, or etc.?       

     For LONG TERM FINANCIAL PLANNING, I personally would bet on the Mortgage Reduction course of action being the favorable one in most cases.  But each homeowner must consider their own level of comfort when making this decision.  As with any financial decision, their is an element of risk ... and homeowners should be made aware of that fact and discuss their options with their financial professionals before making a final decision.       

     All of the above is great "food for thought" ... and at decision time, ultimately  the Homeowner themself may have the only "right" answer regarding how to proceed.           

Gene

 

 

    * If YOU are seeking information and answers as to whether a Refinance might be possible for your financial scenario and property, please contact me.             

     Together we will analyze your current Mortgage and Financial situation ... and then move forward with a course of action that will benefit your personal and financial needs best.  I look forward to speaking with you soon!    

     Gene Mundt:   Direct: 815.277.4036   Cell: 708.921.6331   Email: gene@chicagobancorp.com www.genemundt.com      

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Gene Mundt

Regional Manager - Mortgage Lender

American Portfolio Mortgage Corp.

                                                                    Personal NMLS #216987

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NMLS # 175656

 

Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.  Gene Mundt, Mortgage Lender can be contacted at:  815.524.2280 or via his email: gmundt@goapmc.com.

Contact Gene Mundt, Mortgage Lender soon!

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Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. Jane Peters 09/29/2010 08:56 PM
  2. Dagny Eason 09/29/2010 09:56 PM
  3. Donald Bradbury 09/29/2010 10:05 PM
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Topic:
Lending / Financial
Location:
Illinois Du Page County Naperville
Groups:
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Tags:
cashin refis
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Comments 14 New Comment

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Ambassador
435,816
Paul McFadden
Mortgage Loan Officer, Bellevue Washington Home Lo
Alaska USA Federal Credit Union

Gene: Thank you. That's great advice. I've had a few of these recently; usually a change in rate and term. Thanks for the post. You're the man!

September 29, 2010 10:54 PM
Rainer
129,336
Andrew Martin
Keller Williams - Danville

I just put about 30K into my loan to buy it down so I could get out of a 10/1arm to a 30year fix. Rates are so low on jumbos right now, it was a no brainer to buy it down.

September 30, 2010 01:05 AM
Rainmaker
298,723
Karen Pierce
Karen Pierce | Housing Counselor |Oregon

You are right, Gene - this is VERY GOOD food for thought, once again thoughtfully presented and "user friendly".

September 30, 2010 02:20 AM
Ambassador
894,389
Missy Caulk
Realtor - Ann Arbor Real Estate
Missy Caulk TEAM

Excellent information, with rates so low it can be helpful to many homeowners. Too bad Realtors like me, who did Stated Income Loans can't do them.

No I didn't lie, would never do that, but I know many who did.

 

September 30, 2010 09:08 AM
Rainmaker
637,322
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Rodney:  $40,000 might sound like alot .. but your client is a prime example of the very individualized components that go into making a final decision regarding these loans.  Given her financial situation and how long she hopes to stay in this home ... $40,000 could still be a bargain.  Exactly why getting the facts and working with a professional is so very important in making these decisions too.  Thanks for offering up your info ..

Chris:  Sounds like a very good option for you .. and glad to hear it!  Perhaps the biggest challenges involved in this option is getting the homeowner to inquire about the Refi in the first place ... and having the cash to come in with.  Your scenario proves it can be worthwhile to make the effort.  Good to hear from you again, Chris!

Charita:  Better late than never, huh??  I hope this post serves a purpose ... and that's to get people to pick up the phone and inquire about their own individual situations.  You never know until you ask ...    Thanks again for bringing the topic to my attention and the forefront of discussion.

 Dagny:  I'm glad you approved my sending the post to you and your clients.  If I can answer any questions or help in any other way ... just yell!

Hey Paul!  Great to see you!  And yes, these are cropping up with the rates being so low right now.  Glad that it has worked-out for some of your clients for their benefit.  For others in your area ... I'm hoping they read this and are moved to get in contact with you.  Hope biz is good!

Andrew:  You offer another great example of how this type of financing can work to enhance your overall financial scenario.  Very glad to hear that you took advantage of it personally ... and now can provide testimony as to the effectiveness of Cash-Ins.  Spread the news, Andrew!  Thx for writing ...

Karen:  User-friendly ... is that a nice way of saying I do simple well??  lol   Thanks ... as I know it was a compliment!  I try to remember that we're not all in the business and don't all understand the "lingo".  Hope all is going well with you and your new position. 

Missy:  Yep ... the killer stated-incomes ... lol.  Reminds you that there  is good and bad to everything.  And lying ... never ever good ... you're so right about that.  Hope this post serves to help those that CAN be assisted and helped ... and at minimum, lots of inquiries are made.

Gene  

September 30, 2010 10:17 AM
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Rainmaker
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Gene Mundt

Mortgage Lender - Chicago/Chicagoland Mortgages
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