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Interest rates are falling again, and many Albuquerque homeowners are now deciding on what they should do with the equity they’ve gained in their homes. Some homeowners are considering using that equity for home improvement projects, bill consolidation or for a college education. Whatever their needs may be, homeowners are looking to tap into that equity. But, should the homeowners do a full-refinance, take out a second mortgage? Indigo Mortgage can help you with that tough decision!

The answer to this depends on your first mortgage and how much equity you intend to tap into. A full-refinancing could be a lower or higher interest rate. Depending on how much you are borrowing and what the new payment looks like, a full refinance may be worthwhile.

To calculate this, you will need to determine what the payment will be on a full-refinance using today's’ rates including the cost of cashing out and closing costs. From there, look at what the payment would be on a second mortgage while leaving the first mortgage in place. Then, add the second mortgage payment to the current first mortgage payment. Then, compare the second to determine which will fit your budget better. It’s just that easy!

If you choose a second mortgage, there are some things to consider. Clients need to make sure it’s a fixed-rate second mortgage and not a HELOC (Home Equity Line of Credit). HELOCs carry a variable rate.

If you’re shopping for a full-refinance, make sure to use a local Albuquerque Mortgage company, like Indigo Mortgage. Indigo Mortgage will give you an honest evaluation and assist you instead of trying to sell you a loan. Indigo Mortgage will provide you with accurate information and won’t try to sway you one way or the other.

Published in Blog
Tuesday, 16 April 2019 15:33

KKOB - April 9th, 2019

<>Ben Lucero speaks about which is better? A full-refinance or taking out a 2nd mortgage equity loan?
Published in Radio
Tuesday, 15 January 2019 20:39

KKOB - November 27th, 2018

<>Ben Lucero speaks about whether a full refinance is better than taking out a 2nd mortgage equity loan.
Published in Radio
Friday, 03 August 2018 20:01

Refinancing Home Equity Loans

Home Equity Lines of Credit or HELOC’s, also referred to as a second mortgage, have always been a popular avenue for home owners to tap into their home’s equity at a low interest rate. The problem with HELOCs is that they often carry a variable rate and when interest rates start to rise, so will the payments.

When the fed announces another rate hike in the coming months, HELOC’s will instantly go up by a .25% to .5%. The rule of thumb in today’s financial world is that each quarter the rate will increase by a .25% to .5% so this time next year, those HELOC rates will be a full 1% to 2% higher than they are today.

We have already seen two rate hikes in the last six months and people with HELOCc are feeling the effects. Many home owners with HELOCs might have been lulled into making the low interest only payments over the last few years and neglected to pay down the principle, creating a ripple effect because the principal is not being reduced, at the same time the interest rate is increasing. If home owners do not take some kind of action to get these HELOCs paid off or paid down, they can realistically see their payments double, triple, or quadruple over the next few years.

With mortgage interest rates still at reasonable levels, now would be an opportune time to look into refinancing both the first mortgage and HELOC into a low fixed rate mortgage, if the home owner has enough equity to accommodate both mortgages.

If the borrower is a military veteran, there’s more good news-- they can refinance up to 100% of the value of the home to accommodate this. FHA will allow up to 97% loan to value. We encourage borrowers with HELOC’s to call Indigo Mortgage and see if a refinance will improve their loan payoffs and perhaps save some money each month.

Published in Blog
Tuesday, 25 April 2017 22:26

KKOB on April 25

Indigo Mortgage is New Mexico's #1 VA Loan mortgage broker. Ben Lucero discusses some of the basic information that every veteran should know about VA Loans.

Published in Radio
Tuesday, 18 April 2017 16:03

KKOB April 18

Working with a mortgage broker like Indigo Mortgage provides borrowers with many advantages. Ben Lucero discusses how a local broker can save you money on your loan or refinance.

Published in Radio

The possibility of an interest rate hike that affects mortgages is on everyone’s mind. The Federal Reserve may make the announcement this month and many are concerned about what this will mean for interest rates in the short-term. Indigo Mortgage would like to reassure you that even if mortgage rates rise, there are steps you can take now to protect yourself and ensure that your mortgage payments stay as low as possible.

First of all, the forces that determine mortgage interest rates have already taken the possible rate hike into consideration, and we’ve been seeing rates tick up for the past couple of months. If mortgage rates rise, they will rise gradually throughout 2017, but should remain within 1% of where they are now.

The interest rates that will be immediately affected are variable rates, such as Home Equity Lines of Credit (HELOC) and credit card interest rates. If the .25% rate increase is put into effect, then you will see HELOCs and credit card interest rates rise by .25% each quarter in 2017. By this time next year, you can expect those rates to be at least 1% higher than they are now. It’s possible that the rate of change may increase so that variable rate changes could become substantial.

It’s possible that interest rates may rise, so Indigo Mortgage invites you to take action now to keep your payments as low as possible. Consider getting a low fixed rate on your HELOC or refinance your current mortgage to take out some equity and pay off high balance credit cards. Indigo Mortgage is always here to help and answer any mortgage questions you may have!

Published in Blog
Monday, 28 November 2016 21:06

KKOB on November 29

Today on KKOB, Ben Lucero talks about the dangers of holding onto a home equity line of credit for too long, and what the potential rate increase next month could mean for homeowners.

Published in Radio

A home equity line of credit, or HELOC, allows a homeowner to tap into their home’s equity at a low interest rate. HELOC’s are great for major expenses such as education, home improvements or unexpected medical bills. However, because HELOC’s carry a variable mortgage interest rate, when interest rates rise, so will payments.

When the federal reserve announces a .25% rate increase in December, HELOC’s will instantly be impacted. Each quarter thereafter, rates can continue to increase by .25%, so by this time next year, HELOC rates may be a full percentage higher than they are today.

Many homeowners with home equity lines of credit may have been making low interest only payments and neglecting to pay on the principle. This is a problem. With the potential continued increase in rates, homeowners with HELOC’s could realistically see their payments double or triple over the next few years.

While rates are still low, now would be an opportune time for homeowners to consider refinancing both their first and second mortgages into a low fixed rate mortgage. And if you’re a veteran, the good news is you can refinance up to 100% of the value of the home to accommodate this, and the FHA will allow up to 97% loan to value.

If you have a home equity line of credit, Indigo Mortgage encourages you to call today and see if a refinance can save you money!

Published in Blog
Tuesday, 22 November 2016 15:48

KKOB on November 22

Ben Lucero of Indigo Mortgages discusses the recent rise in interest rates and what this means for homebuyers. You may be surprised by how many great financing opportunities are still out there!

Published in Radio
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From The Blog

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  • The Pre-Qualification Process and Why It's Important to Stay Local +

    Preapproval is necessary for the home-buying process. In fact, it’s so necessary that realtors in Albuquerque are hesitant to show Read More
  • Full-Refinance or Taking Out a Second Mortgage Equity Loan? +

    Interest rates are falling again, and many Albuquerque homeowners are now deciding on what they should do with the equity Read More
  • New Mortgage Rate Updates +

    Homeowners in Albuquerque who are looking to refinance have some good news as interest rates over the last few weeks Read More
  • First Time Home Buyer Loans +

    Many mortgage lenders make offers for first-time home owner loan programs or first responder programs. However, they embellish what those Read More
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