EL SEGUNDO HERALD January 22, 2021 Page 7
(BPT) - Despite mortgage rates
hitting historic lows during the
last year, many homeowners still
haven’t considered refinancing
their mortgage - essentially,
replacing an existing mortgage
with a new mortgage loan that
has new terms and potentially a
lower interest rate. Homeowners
in lower-income brackets may be
convinced they won’t qualify for
refinancing because of high debt
compared to income, poor credit
scores or lack of savings to cover
closing costs.
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However, new refinancing options
are available to help make monthly
housing payments more affordable.
Fannie Mae - which helps make
the 30-year fixed-rate mortgage
and affordable rental housing
possible for millions of people
in America - recently released
RefiNow, an option that makes it
easier for lenders to help eligible
homeowners earning at or below
80% of the area median income
refinance at a lower interest rate
and reduce their monthly mortgage payment.
“Lower-income borrowers typically refinance
at a slower pace than high-income borrowers,”
said Katrina Jones, vice president of Racial
Equity, Strategy & Impact at Fannie Mae.
“Especially for those who have a high- or
adjustable-interest rate loan, refinancing may
Three Reasons to Consider
Refinancing Your Home...Now
help make housing costs more affordable
and sustainable by lowering their mortgage
payments, reducing the total amount of interest
paid over the life of the loan or providing
more stable monthly mortgage payments.”
The new RefiNow option requires that eligible
homeowners achieve a savings of at least $50
in their monthly mortgage payment, but they
can potentially save up to $100-$250 per
month, according to the Federal Housing
Finance Agency.
It also offers savings on up-front out-of-pocket
appraisal expenses up to $500.
“We can put money-saving refinance options
in reach for more homeowners by removing
some perceived barriers - such as appraisal
costs - to improve affordability and promote
sustainable homeownership,” said
Jones. Jones provided three reasons
to consider refinancing now:
* Interest rates are low - Mortgage
rates remain low, despite moderate
increases. According to Fannie Mae
research, experts expect the 30-year
fixed mortgage rate to average 3%
through 2021, before beginning
to rise in 2022. The takeaway for
homeowners: There’s still time to
consider refinancing.
* Lower your monthly mortgage
payments - Refinancing at a lower
interest rate may help decrease
monthly mortgage payments, which
could increase monthly savings.
Refinancing may also help reduce
the total amount of interest paid over
the life of the loan, depending on
the terms of the new loan and the
existing loan.
* Getting started is a phone call away
- Homeowners should contact several
mortgage lenders to discuss refinance
options to find the best option and
terms for their situation, and should always
compare offers and shop around.
Homeowners wondering if refinancing makes
financial sense can access Fannie Mae’s
Refinance Calculator and learn more about
refinancing options at KnowYourOptions.com.
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(310) 261-0798
Assoc Broker 31 years/Manager
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