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Should You Refinance Your Mortgage: An Interview with Kirk Chivas of First Commerce Financial

By Kirk Chivas

Please describe the background of your company and some of your qualifications.

Kirk Chivas is a licensed Loan Officer and co-owner of First Commerce Financial, LLC, a mortgage brokerage based in Wixom, Michigan. With over 17 years of experience, Kirk has committed to providing Michigan residents with accurate and honest mortgage advice. If you have any questions about your current or future mortgage needs, please feel free to ask Kirk a question over on his website at www.firstcommercefinancial.com.

How much equity do I need to have in my home before I consider refinancing?

Some can still refinance with zero equity via the HARP 2.0 program. This program is designed to help homeowners lower their current mortgage rate if you owe more on your home that what it is currently worth. We can help you determine if you are eligible. If you are not eligible for a HARP refinance, typically all you need is 5% equity to refinance.

My credit score isn't very high; will this affect my ability to refinance?

You will need a minimum score of 620 to be eligible for a refinance.

What are the main reasons people choose to refinance their mortgage?

There are five main reasons folks will consider a refinance:
To Take Advantage of a Better Mortgage Rate
Cash Out Refinance
To reduce or alter risk (e.g. switching from a variable-rate to a fixed-rate loan)
To consolidate 2nd mortgages and other debt(s) into one home loan
To free up cash in your monthly budget

Is refinancing the best option if I want to lower my monthly payments?

If you can find an interest rate that is lower than your current rate, and you don't plan on moving anytime soon, a refinance may be the best option to lower your payment. If the rates are not lower, and you have a large chunk of money to put down on your mortgage, you can request the Lender re-amortize your loan, which will also lower your monthly payments.

Can I still refinance if I don't plan on staying in this home for a long time?

Yes, you can. There are No-Fee options available which means there is no breakeven period to recoup any upfront costs.

Can I still refinance if I have a second mortgage?

Yes. You may be able to roll the loan into your new mortgage or you may have to subordinate the 2nd mortgage (move behind the new first mortgage). It will depend on the equity in your home.

How can home mortgage refinancing affect my financial situation in retirement?

Many folks will move to a 10 or 15 year fixed in their middle aged years so the home can be paid in full at retirement age so there is no monthly house payment.

What are the risks associated with refinancing my home?

It is not advised to move from a 15 or 20 year loan to a 30 year fixed if at all possible. This can add significant interest costs due over the life of the loan.
If you plan on moving in the next 2-3 years, you may not recoup your upfront costs that could be required to refinance.
Do not take a loan with a pre-payment penalty if possible.

What is the best way for people to get in contact with you?

248-912-1002
kirk@firstcommercefinancial.com

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