How to set goals and anticipate a market drop that will help you save.
When Wayne Gretzky was asked how he kept his competitive edge, he famously said "skate to where the puck is going, not to where it's been." This advice also works when setting financial goals.
If you want to get the best possible rate on your refinance, and ensure that you don't miss opportunities, here is how you skate to where the puck is going.
Step #1 - Set your savings goals
First define exactly how much you want to save per month. This could be 200 dollars, 300 dollars, 500 dollars, and it can obviously change all the time. But the point is to understand the next step specifically.
Step #2 - Calculate Target Interest Rate
Next, take that payment savings, and work backwards to calculate the interest rate that you'd need to get down to in order to hit that savings level. Using your current mortgage balance will keep that figure conservative, as your balance will drop over time.
Also - it's important to only use your Principal and Interest Payment to calculate savings. Taxes and Insurance calculations will mess up the figures, and Taxes and Insurance generally don't change if you refinance your home.
Step #2 - Track the Market
At this point you just need to track the market. As soon as you see average rates go below the threshold you are waiting for, you know that it likely results in the savings desired.
It is a BIT complex - and there is still a lot of structure involved, in terms of accounting for closing costs, and strategy going forward, so there is an alternative...
Let us do it for you...
You're going to need a lender to fund the refinance anyways. So if you want to skip all of the work, and have someone watch the market for you, AND advise you on the right structure for the market moving forward - we are here to help.
Just CONTACT US or send me an email at daniel@lehmangrp.com
I'll respond and request a few things:
a) A copy of your mortgage statement,
b) The amount you are trying to drop your payment by (if you need help figuring out what is feasible, let me know and I can help you)
c) An estimate of the value of your home.
No credit checks, no income requests - none of that until it's time, and unless you want to verify that you are in the best possible position.
I'll enter you into my tracking software, will be there to answer any questions you have, and will be able to alert you to specific opportunities. Set it and forget it.