Over past two years, mortgage rates have come down in the Indianapolis area. For home purchases made around two years ago, now is a good time to refinance.
Trend analysis shows that the lowest rates for 30-year mortgages in Indianapolis, during the past two years, happened a few months ago. The lowest available rates were around 3.4%. Since that time, according to Zillow, the trend is upward. This means it is a great time to refinance and lock in a low rate below 4%, if a person believes the upward trend will continue.
How Does Refinancing Help a Luxury Home-Owner in Indianapolis?
A 30-year fixed mortgage was 4.65% in August 2013 and is now 3.87%, which is a difference of 0.78%. Some may wonder about the significance of such a small percentage amount.
Here is an example:
A homeowner lives in Carmel, which is one of the nicest suburbs in Indianapolis homes for sale. The median value of a home in Carmel is $305,500. Two years ago, the purchase price of the home was $280,000 with 10% down. The current loan balance is $252,000. The lowest current rate for a person with superb credit is 3.750%. The monthly payment on a thirty-year fixed loan (loan interest only) would be $1,167.
Previous monthly payments at the rate of 4.65% (loan interest only) were $1,299. By refinancing, the homeowner saves $132 per month = $1,584 per year = $47,520 over the full 30-year term. Smart investors like to maximize their investments and a luxury home is one of the most important investments. Reduced monthly mortgage payments re-capture lost cash that is wasted paying unnecessary loan interest. This is the reward for Indianapolis families who refinance their homes when the rates are low.
How About Selling a Home?
When mortgage rates are lower, this helps homes sell a bit more easily. When the amount of monthly payments is less, this allows more purchasers to qualify to buy the home. Typically, when finance rates are low and qualifying for loans is easier, the demand for homes goes up, as there are more buyers interested. This means sellers of homes get a better price when they sell.
Available Lenders That Support the Indianapolis Area
Here are a few lenders that currently are giving good mortgage rates for homes in the Indianapolis Area:
- ConsumerDirect Mortgage – This is a division of First Bank, which has its headquarters in Tennessee. This bank is over one-hundred and six years old. It is the largest private bank in Tennessee. They have a license to originate loans in all fifty states.
- eLend – Everything is handled online, by email, or telephone. Some customers see this as efficient; others think it is obnoxious. The best rates offered for refinancing are for customers with FICO scores above 740, for owner-occupied single family homes located in a decent area, and with no more than an 80% loan-to-value (LTV).
- eRates Mortgage – This mortgage company is over twenty-years old. It started in Charlotte, North Carolina. They are now direct lenders to consumers in thirty-two states.
- First Internet Bank – An early adopter of using the Internet to make direct loans to customers. This Internet-only bank has no branches. It is sixteen-years old with over US$1 billion in assets.
- HomeDirect Mortgage – This company makes good use of technology with an application system that is automated and online. Moreover, a certain person is the mortgage banker for each loan. They also service their own loans and do not farm out this work to third parties. This means the consumer has stability over the life of the loan, in who they deal with.
- National Bank of Kansas City – This is a full service bank with its headquarters in Overland Park, Kansas. It has over US$600 million in assets and six branches. As a mortgage lender, it is able to lend for VA and FHA loans in all states.
- Northpointe Bank – This fifteen-year old bank has its headquarters in Grand Rapids, Michigan.
- Pulaski Bank Home Lending– This bank started in 1922. It has thirteen full-service branches in the St. Louis area and makes direct-to-consumer loans via the Internet.
- Sebonic Financial – This is an Internet-only startup in mortgage lending, who promises to make home loans easier.
- Smarter Mortgages – This is a direct lender approved by Fannie Mae to make home loans in twenty-five states. The company is ten- years old and already closed over US$2 billion in loans.
- United Home Loans – This mortgage lender has headquarters in Chicago. It provides loans to homeowners in eight states including Indiana.
Depending on the rate of an existing mortgage, it could be a great time to refinance a home in Indianapolis. Sellers of homes in Indianapolis may find it easier for potential buyers to get a lower rate home loan right now, which should help with selling the home.
Competition amongst banks, mortgage companies, and specialty online mortgage lenders is fierce. Many are offering reduced lending fees and/or no closing-costs loans at rates that are currently very attractive.