AboutJaynee Sasso Expertise I can answer questions about how to develop an effective budgeting strategy, rebuild & repair your credit, getting out of debt, developing a financial plan beyond paying bills, money & relationships and positioning yourself to experience a lifetime of financial success.
Experience Jaynee Sasso is founder and president of Faithful Assistants Inc, which is an online financial empowerment center. Sasso has been a licensed real estate agent for ten years and a broker for five years. As a foreclosure specialist, she helped families understand their options and helps them survive foreclosure and financial ruin.
Prior to founding Faithful Assistants Inc. Sasso worked as a licensed registered representative (Series 6 & 63 securities license) and life insurance representative for three years. It was during this time, as well as, her continuation in real estate that lead to the creation of her company. With all the financial difficulties facing Americans today she feels compelled to help them uncover the root of their financial problems and teach them the financial principles that would change their mindset first and ultimately their behavior.
Publications I currently have a financial column in the Urban Views Weekly newspaper. Please visit www.urbanviewsweekly.com You can also get more financial tips by visiting my blog at www.commonsensewaytowealth.blogspot.com
Education/Credentials Sasso recently accepted the position of Chief Financial Officer of Mt Gilead Baptist Church in Newport News, VA. She attended Clark University in Worcester, MA and is an alumnus of the Congressional Youth Leadership Council & A Better Chance Inc., 1995. She also served as a member of the Short Hills BNI chapter and speaker for the Somerset County Coalition On Affordable Housing SCCOAH - Step by Step 1st time homebuyers program. She is the former host of the "Protect Your American Dream" radio broadcast featured on the WMCA 970 AM.
Question You may be getting lots of questions right now with the financial crisis. I
actually have an interesting question for you. I did as the "real estate"
professionals my question but since they need to make money right now, I
fear they will all say, yes, refinance. I need to ask someone I could trust for an
honest answer to best make my decisions. So here goes:
We currently have a conventional mortgage through my credit union (then got
sold to Central mortgage company) but our interest is at 6.875%. We do not
pay PMI, etc. Our home was purchased at $300 and we put down at least
20%..so we owe, 228.5k....My husband does not feel we should pay PMI
because we put down more than 20%. However credit scores are in the high
500s hence the other banks wanting the PMI. I talked to Bank of America
today and they said on FHA they offer 5% right now and with the PMI it would
come out to be like 5.25-5.5%. We have a 30yr loan...we are not sure how
long we will stay here...at least 5yrs if not more but we do not believe this will
be our final home for our family. We have NEVER paid late on our mortgage
and I have it taken out automatically.
Question is: Would it be worth the savings by refinancing, paying more
closing costs, to get a 5% rate and have to pay PMI whereas now we have
6.875 but do not pay that...??
Thanks so much...I greatly appreciate it! I know with lower interest rates, we'd
like to try and take advantage and feel that we deserve it since we did not buy
a home we couldn't afford and should be rewarded for our loyalty and good
payments, etc.
Answer Hi Heather,
There are a few things to keep in mind about the refinance option:
1. Your home may have dropped in value, which is why your current mortgage company is requiring PMI payments. As a result, your may not appraise for the amount needed to get the loan and you may put out money for a useless appraisal.
2. By todays your present credit score may not position you to negotiate the best possible terms for the refinance. Therefore, it may cost you too much to secure the loan (closing cost, points, misc fees). In order to make this a worthwhile venture you need to negotiate the best possible terms and try to save yourself as much money as possible. Unless you are prepared to pay these cost out of your own pocket (most people do not).
3. How financially secure are you if an unforeseen financial crisis were to hit your family? The reason I ask is because eating up more equity by refinancing may pose a huge problem if you should need to sell your home for any reason within the next 5yrs (I expect the market to bounce back by then of course). Basically, you pose the risk of owning a home that you owe more than what its worth.
4. Will you actually reap the rewards of the savings you may gain as a result of refinancing? The main purpose of leveraging more debt is to increase cash flow in an effort to take advantage of some other opportunities to create wealth for you and your family. You need to identify those other opportunities.
With those things in mind this is a great time to refinance. I would give it a shot and see what terms you actually qualify for and go from there. If your payments are significantly lower then you can simply calculate your savings over 5yrs versus your PMI payments over the next 5 yrs (this will give you a general idea). You must decide if your goal is to build up equity or increase cash flow. PMI payments won't help to increase the equity in your home but the reduced mortgage payments will increase cash flow. If 5yrs is your time limit then your goal should be cash flow because you really won't build up too much more equity in a 5yr period just making your regular monthly mortgage payments.
Please be sure to visit www.commonsensewaytowealth.com and Join Our Mailing List to get further insight on how to optimize your financial health.
