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CNN Live Today

Top Five Tips: Mortgage Rates

Aired May 27, 2003 - 10:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDRICKA WHITFIELD, CNN ANCHOR: With the volatility on Wall Street, a lot of people are looking to invest on Main Street, buying and selling homes. This hour, the Commerce Department reported that new home sales rose by nearly 2 percent last month to the highest level this year. Historically, low mortgage rates are making home buying more attractive than ever.
Joining us now to talk more about that is CNNfn personal finance editor, Gerri Willis.

Good to see you -- Gerri.

GERRI WILLIS, CNNFN PERSONAL FINANCE EDITOR: Hi, Fredricka. Good to see you.

WHITFIELD: All right, so you make a decision that it's time for me to refinance. How do you really get started?

WILLIS: Well, you've got to start by doing your homework. I think everybody knows that rates have fallen to lows, but if you look at the national averages they don't reflect what you might find in your neighborhood. Go to a Web site like bankrate.com, which will tell you the rates that lenders in your area are offering, because they vary by region. And make sure to check out some of the online lenders like countrywide.com, who can also offer very low rates.

WHITFIELD: And in addition to doing your homework, you're saying that you really want to be competitive and be choosy, don't you?

WILLIS: That's right. You want to make them sweat. Make sure that you are talking to other -- when you are talking to your lender that you have right now to show them these low, low rates, so that they can meet or beat them.

WHITFIELD: And then, how do you streamline your refinancing?

WILLIS: Well, not everybody is able to do this, but some lenders will allow to you cut your costs by not paying for the credit report, not paying for the appraisal. This can cut about $300 out of your cost of refinancing. It makes it a better deal for you, but you have to do it with your original lender. Ask them if there are special deals available, and if you can take the streamlined approach.

WHITFIELD: And once you make that decision and things seem to be working out, say you have a 30-year mortgage already, you want to refinance it, your recommendation is you don't necessarily want to go for another 30 years, but consider shortening it a bit. WILLIS: Yes, if you have built up a lot of equity in your home, you don't want to take out another 30-year loan. You want to take out a 15 or possibly even a 10-year loan if you can afford those monthly payments. Countrywide right now is reporting that 15 percent of their business is this 10-year loan, and let me tell you, if you can get your mortgage behind you in just 10 years, that's a big positive.

WHITFIELD: No kidding. And in the long run, you end up saving thousands of dollars by shaving off some of those years.

WILLIS: That's right. Absolutely correct.

WHITFIELD: All right, now, you recommend that you may want to -- if you have two -- at least two mortgages, you may want to try to roll it into one?

WILLIS: That's right. If you have a high-interest second mortgage on your house, you may want to roll it into one loan, a cash- out refi (ph). This is a really common product being used today. And you can roll those two loans into one, save yourself money over time, and lock in these low, low rates. They haven't been this low in 45 years, Fredricka, and this is why you're seeing some of these, you know, monstrously high new home sales today. It's just because it's a great deal for consumers.

WHITFIELD: But when you roll into one, is it likely you're going to be facing a higher mortgage payment per month?

WILLIS: Well, right. Instead of paying the two, you'll be paying the one. But you'll be financing it at a very low rate of interest. It should drop your costs if you have part of that loan at a higher rate now. So, you actually should see lower costs.

WHITFIELD: Wow! All right, Gerri Willis, thanks very much.

WILLIS: Thank you.

WHITFIELD: Helping us save money.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.






Aired May 27, 2003 - 10:16   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: With the volatility on Wall Street, a lot of people are looking to invest on Main Street, buying and selling homes. This hour, the Commerce Department reported that new home sales rose by nearly 2 percent last month to the highest level this year. Historically, low mortgage rates are making home buying more attractive than ever.
Joining us now to talk more about that is CNNfn personal finance editor, Gerri Willis.

Good to see you -- Gerri.

GERRI WILLIS, CNNFN PERSONAL FINANCE EDITOR: Hi, Fredricka. Good to see you.

WHITFIELD: All right, so you make a decision that it's time for me to refinance. How do you really get started?

WILLIS: Well, you've got to start by doing your homework. I think everybody knows that rates have fallen to lows, but if you look at the national averages they don't reflect what you might find in your neighborhood. Go to a Web site like bankrate.com, which will tell you the rates that lenders in your area are offering, because they vary by region. And make sure to check out some of the online lenders like countrywide.com, who can also offer very low rates.

WHITFIELD: And in addition to doing your homework, you're saying that you really want to be competitive and be choosy, don't you?

WILLIS: That's right. You want to make them sweat. Make sure that you are talking to other -- when you are talking to your lender that you have right now to show them these low, low rates, so that they can meet or beat them.

WHITFIELD: And then, how do you streamline your refinancing?

WILLIS: Well, not everybody is able to do this, but some lenders will allow to you cut your costs by not paying for the credit report, not paying for the appraisal. This can cut about $300 out of your cost of refinancing. It makes it a better deal for you, but you have to do it with your original lender. Ask them if there are special deals available, and if you can take the streamlined approach.

WHITFIELD: And once you make that decision and things seem to be working out, say you have a 30-year mortgage already, you want to refinance it, your recommendation is you don't necessarily want to go for another 30 years, but consider shortening it a bit. WILLIS: Yes, if you have built up a lot of equity in your home, you don't want to take out another 30-year loan. You want to take out a 15 or possibly even a 10-year loan if you can afford those monthly payments. Countrywide right now is reporting that 15 percent of their business is this 10-year loan, and let me tell you, if you can get your mortgage behind you in just 10 years, that's a big positive.

WHITFIELD: No kidding. And in the long run, you end up saving thousands of dollars by shaving off some of those years.

WILLIS: That's right. Absolutely correct.

WHITFIELD: All right, now, you recommend that you may want to -- if you have two -- at least two mortgages, you may want to try to roll it into one?

WILLIS: That's right. If you have a high-interest second mortgage on your house, you may want to roll it into one loan, a cash- out refi (ph). This is a really common product being used today. And you can roll those two loans into one, save yourself money over time, and lock in these low, low rates. They haven't been this low in 45 years, Fredricka, and this is why you're seeing some of these, you know, monstrously high new home sales today. It's just because it's a great deal for consumers.

WHITFIELD: But when you roll into one, is it likely you're going to be facing a higher mortgage payment per month?

WILLIS: Well, right. Instead of paying the two, you'll be paying the one. But you'll be financing it at a very low rate of interest. It should drop your costs if you have part of that loan at a higher rate now. So, you actually should see lower costs.

WHITFIELD: Wow! All right, Gerri Willis, thanks very much.

WILLIS: Thank you.

WHITFIELD: Helping us save money.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.