Tuesday, December 6, 2011

5 Tips to Determine if Refinancing Your Deep Creek Lake Home is Right for You

The holidays are a festive time of year on Deep Creek Lake and throughout Garrett County.  With beautiful Deep Creek Lake views, the snow covered Allegheny Mountains and endless trails for those who love breathing in the crisp air this time of year brings, it’s no wonder that many have chosen to settle in permanently to their home on Deep Creek Lake.
If you’ve lived in your Deep Creek Lake home for some time, you’ve experienced the unique opportunities that each season brings and are looking forward to the winter months.  With the new year just around the corner, you may be thinking about your Deep Creek Lake home and how your home fares on the current Deep Creek Lake Real Estate market.  
You may not want to sell your home, but you’ve heard about the current low mortgage rates and you’re curious about cashing in on this prime time in the market.  As always, our goal as Deep Creek Lake Real Estate agents is to make sure you have everything you need to make an informed decision. If refinancing your Deep Creek Lake home in the new year has crossed your mind, there are a few things you’ll want to consider.  
1. Interest rates- Refinancing right now is great for homeowners whose current rates are above 5.5% and are hoping to save on their monthly mortgage costs. For a Deep Creek Lake home; you could potentially save a percentage point or more on an outstanding mortgage.
2. Credit score and income- Most banks in today’s market will require you to have a minimum credit score of 620 in order to refinance. You will also need to prove that your household finances have been stable. If unemployment or other issues have come up that have decreased your finances significantly; you’ll find it hard to refinance.
3. Costs- Refinancing your home will cost you typically 2% of the new loan amount. This includes application, appraisal and inspection fees. Included within refinancing costs is the new escrow account you’ll need to fund. The lender will set up this account for home-insurance and property-tax payments from which they’ll draw annually. Want to avoid this fee? Use the same lender you used for your initial mortgage. Their only costs are limited to issuing new paperwork, so they’re able to keep costs low and can oftentimes speed up the process. Another option is a good faith estimate. Your Deep Creek Lake Real Estate agent can help you determine which option would work best for your home.
4. Adjustable-rate mortgages- Determining whether you’d like to go with an adjustable-rate mortgage or a fixed-rate mortgage can be tricky. An ARM can be a good choice for today’s market as you’ll cash in on the current lower rates, but can be unstable in the long run. However, a fixed-rate mortgage ensures that your rates will remain stable and won’t rise if the market changes.
5. Greater pricing disparity- Based on your current credit score, the rates offered for refinancing can vary greatly. Lenders will look at Maryland’s average loan-to-value ratio and the percentage of homes with negative equity. The higher the percentage of these homes, the higher the rate a borrower will most likely be offered.
We hope these five factors of refinancing your home are useful as you consider this option.  If you have questions about refinancing your home, or are not a current resident of Deep Creek Lake and would like to be; let us know!  We would love to show you around the area and some of the homes that currently available on Deep Creek Lake!
We’re here to help with any of your Deep Creek Real Estate needs and look forward to working with you!

Patrick Kane
Sales Manager/Co-Owner
Coldwell Banker Deep Creek Realty
Your Deep Creek Lake Real Estate Expert

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