MEDFORD >> Uncertainty about the coronavirus (COVID-19) is having a tumultuous effect on the economy, but that doesn’t mean people don’t have options when it comes to protecting their financial bottom line. Dennis Dovie, a financial consultant at Padden Cooper, LLC in Medford, strongly suggests that people seriously consider refinancing. And time is of the essence, he warns.
“Now is the time to look into refinancing your residential mortgage or commercial mortgage,” Dovie said on Thursday. “Liquidity is drying up and the cash reserves individuals had last year are dwindling because of the financial market declines over the past few weeks.”
In response to the market declines, Dovie explained, lenders in both the home mortgage and business loan sectors are drastically lowering interest rates, which means the time is right to ask about refinancing.
“Reducing the interest rate and/or the term of your mortgage could save significant dollars over the course of a loan payout,” Dovie said. “People may also want to consider refinancing in order to take cash out to consolidate other debt.”
“The rule of thumb is to drop one percentage point or more and to stay in the new loan at least two years on average for the refinance to make sense.”
But, Dovie added, even lowering the payout term and not reducing the rate a full percentage point could be beneficial as well.
“The important thing is to contact lenders,” he said. “They can help customers do the math to see if it makes sense.”
Here’s another reason Dovie suggests that people consider refinancing now, besides the fact that rates are very low: Bank and government lenders might tighten up credit/lending standards in the coming months, just as they did with the 2008/2009 mortgage and financial crisis.
“Also, with commercial and residential rates dropping, this might be a good time to purchase additional space for business expansion or that dreamed-about vacation home,” he said. “After all, owners will be eager to sell, to cash in on their real estate holdings. And with the spring season coming, we are entering prime time for home sales.”
The experts at Padden Cooper, LLC are currently helping clients in deciding whether to refinance or purchase. “We have numerous lenders that we deal with who provide our clients with great service and lending products to choose from,” Dovie said. “The important thing to remember - the time to act is now.”
Dovie can be reached at 609-953-1400.