If you have started spring cleaning and stumbled across your mortgage documents, now may be a good time to consider refinancing. Interest rates on home loans continue to remain at an all-time low, and this also applies to new home purchases. 

State Bank & Trust Vice President Leigh Hartley advises homeowners to assess how long they plan to stay in the home and if the savings will outweigh the cost of refinancing. 

“There are incentives for refinancing at this time,” Hartley continues. “However, before making the decision to refinance a home mortgage, there should be tangible benefits before refinancing a home.”

She recommends clients compare interest rate and closing fees to get the best refinancing option.

"One lender might have a lower rate but with higher fees or vice versa,” said Hartley, who has more than 25 years of experience in banking and mortgage finance. “A good lender will listen to your needs and try to figure out based on your individual situation what is the best option for you.”

Hartley stated that State Bank specializes in mortgages without the stress and rigmarole that come with many home loans. They include purchase and refinance options, construction and renovation loans, and loans for physicians. 

“These loans offer some unique underwriting options that would be helpful for the self-employed person where the tax returns may not be an accurate reflection of the actual income,” she continued. “Or someone that may have extenuating credit circumstances that would not otherwise be able to obtain a traditional mortgage loan. All of these loans actually stay in-house with State Bank.”

New Home Purchase

Buying a home is one of the biggest financial decisions many people will make in their lifetime.  With increasing rental costs, the time to purchase a home may be quickly approaching, especially for young professionals.

“Be it in Macon or anywhere in Middle Georgia, this is an excellent time to take advantage of some great low rates. There are also good prices on homes in the area,” said Hartley. “You can get a great home at a payment that is well under what new apartment homes are renting for in this area.”

Hartley encourages first-time home buyers to start early and meet with a reputable lender to get pre-qualified and determine a price range for a home purchase. The loan officer will then help select the appropriate options based on the home price, income, and down payment.

“To make your financial picture look as good as possible and before meeting with a lender, I would suggest paying off or reducing revolving credit card debt as much as possible. This helps improve credit scores immediately,” said Hartley, who is past president and current board member of the Mortgage Bankers Association of Middle Georgia.

She also suggests saving as much as possible for a down payment in advance of a home purchase.

“If you know that you have credit challenges, again, I suggest meeting with a reputable loan officer early,” Hartley said. “They can guide you and give you steps to get your credit in order to buy a home at some point in the future.”

Hartley said that home mortgage interest rates are still at historic lows, and lowering of down payment and credit requirements make buying a home easier and more affordable, especially for first-time home buyers.

“As rates begin to increase, the price range that a buyer can qualify for will decrease,” she continued. “So again now is the time for a first-time buyer to get into the market and get more house for the money.”

In December 2014, Fannie Mae and Freddie Mac began offering 3 percent down payment on mortgages to entice more first-time home buyers to qualify for a mortgage.

Hartley stated that the traditional Federal Housing Authority (FHA) loans provide more flexibility in regard to credit standards and down payment requirements. The FHA loan requires a 3.5 percent down payment and allows the seller to pay more of the closing costs, thus reducing the amount funds the home buyer needs at the time of closing. 

“From a credit standpoint, someone that may have previous credit issues—foreclosure, short sale or bankruptcy—the waiting period to obtain a mortgage are typically shorter for FHA than conventional loans,” said Hartley. “Also, the FHA recently reduced the amount of the monthly MIP (mortgage insurance premium) that is charged on loans making it a more affordable option.” 

Hartley encourages her clients to “get off the fence” when it comes to making a decision to purchase or refinance a home. She explains that on Aug. 1, 2015 the Consumer Financial Protection Bureau (CFPB) will institute changes that may extend the loan process.

For more information, email Leigh Hartley at [email protected] or call 478-757-3371.