- Hi guys, welcome back to the channel.
Today we're gonna discuss
mortgage extensions
and what does that mean?
So if that topic is
interesting to you, stay tuned.
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mortgage education,
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and Saturday.
(air whooshing)
My name is Stephanie Weeks
and I've helped thousands of customers
with millions and millions
of dollars in mortgages.
And my goal and my passion
is to help consumers
be educated through that mortgage process.
So thank you for checking in.
Thank you for checking out the channel.
Hopefully you subscribe.
Hopefully you're liking
the videos and stay tuned
because this one's a good one today.
(air whooshing)
So today, as I mentioned,
we're going to talk about
extending your mortgage term,
and if that's right for you.
I'm going to come up with several examples
of when this might apply.
Some are good, some are
bad, some are indifferent,
some really, really suck.
But where we're gonna start today is
the first example would be heaven forbid,
what if you were on a
loan with your spouse
and your spouse passes away?
That would be just
awful and heartbreaking.
And maybe you want to keep your home
and keep your kids stable
or whatever your situation may be.
And when you had a two income household,
you guys were maybe wanting
to pay the house off
in 10 years or 15 years.
And so you were aggressively
attacking that mortgage term
and trying to save tons of money,
which made complete sense in that example.
But now things have drastically changed
and you just need some cashflow
because now you are a one-income family.
So this would be an example of a time
that might actually make sense to do
what does it seem like what
you normally hear about,
and that is extending your mortgage term
instead of shortening it.
That way you can have a more
affordable monthly payment
and keep the house that you love.
(air whooshing)
So let's say
and you do need to extend your term
because your spouse has
unfortunately passed away.
If you have a 15-year mortgage
at a 3.5% interest rate
with a balance of around $175,000,
you're probably looking at a principal
and interest payment of
around $1251 a month.
Let's say if you refinanced that
to a 3% rate on a 30-year term
well, that payment would drop
more to like $737 a month.
And that's a huge difference
that could really, really
help you with cashflow
if you've now suddenly, for some reason,
become a one-income household.
That would be one example for you guys.
(air whooshing)
Here's your next example.
Maybe you're having a career change.
Maybe it's planned,
maybe it's not planned,
but something's changed.
I mean, you've got people
who are going from salary
to all commission which
you have to get used to
and you don't know exactly
what you're going to make,
but there's more potential there.
Or maybe you're just wanting
to look more toward retirement
and maybe work part time or
maybe you're starting a family
and you want to work part
time instead of full time.
And so you've had some
type of career change.
A career change could be
another unique example
where actually extending
your mortgage term
may make more sense for you
than shortening your mortgage term.
You see here's what's important,
yes, in an absolutely perfect world
you're going to get the
lowest possible interest rate
at the lowest possible mortgage term,
which is going to give you a high payment,
but going to save you thousands
and thousands and thousands of dollars.
And that's wonderful, right?
And sometimes that works out
and if you can make it happen, oh my gosh!
Make that happen, but you know what?
I'm a realist and
hopefully you are as well.
And so that does not always work out
and sometimes a longer mortgage term,
the typical 30-year that you hear about
might make more sense for you,
your family, your situation,
based on what you're going through
and what you're dealing with.
(air whooshing)
Okay, so we've talked
about the negative thing,
what if your spouse passes and
now you're in a new situation
we've talked about a career change,
that would be another example.
The next thing we're going to talk about,
and we're going to move on to
in our third example would
be, if heaven forbid,
you find yourself going through a divorce.
That would be ultimately another example
of you going from a two
potentially income household
down to a one-income household.
And that might require additional cashflow
or a lower mortgage payment
rather than having to uplift
yourself and or your family
and move into a different house
that may be less expensive.
So if you find yourself on of
10 or 15 or 20-year mortgage,
and suddenly you have
had to make that change,
and you're going through a divorce
that you're of course not expecting
because whoever expects that, right?
Maybe those lower payments are
gonna dramatically help you.
So let me give you an example
of some numbers to compare
and bear with me while I check my note
cause it's a lot to keep in the brain.
But let's say if you
have a 20-year mortgage,
your rate is 3.25%.
That would give you $992 a
month mortgage payment, okay?
And that's $175,000 loan amount
in case I forgot to say that.
Now, let's say that you went
to a $200,000 loan amount,
maybe you had to pull some
money out for whatever reason,
3% interest on a 30-year term,
that principle and
interest payment is $843.
So we're going from $992 down to $843,
even though we increased our loan balance.
So that would be an example of
if you're going through
an unexpected divorce
and you need to extend your term
in order to increase your cash flow
and lower your monthly payment.
That's a good example of what
that decrease could look like
based on those specific numbers.
(air whooshing)
Okay.
Well, we're on to number four now.
So maybe you're not
going through a divorce
and maybe you're not going
through a career change
and maybe your spouse has not passed away,
but maybe there's some other life event.
I mean, we've all been
through so many things.
I'm recording this in 2020,
and at this point I have been
through the mortgage meltdown.
I've been through hurricane Katrina.
I have been through the COVID,
(chuckles) coronavirus now,
as well as other things that
I can't even think about now.
But those are some crazy life events
that I of course never
imagined and never expected.
And so what if any of those things
changed the course of my plans, right?
That would be an unexpected life event.
That could be another potential example
of when what does not
seem to be the normal,
"Hey, let's extend your mortgage rate",
might be actually an option
for you and your situation.
(air whooshing)
Let's say that you have a
change in your life plan
or something to do with your retirement
and for whatever reason.
And now you may need a
lower monthly payment
when you were anticipating
having paid this mortgage off
and getting rid of these
darn payments altogether.
We know life changes and plans change,
so I'm here to educate
you in any way that I can
on all of your different options.
So let's say that an extension
on your mortgage term
makes sense to you.
Did you know that you're not only stuck
with choosing between a
15-year and a 30-year mortgage?
There's actually 10, 15, 20, 25 and 30.
So just because you have to extend,
you may not have to go all the way to 30,
you know, like a 25 or something
might be a good option for you as well.
So just kinda keep that in mind
as potential options for
extending your mortgage term.
(air whooshing)
Okay.
What have we covered today so far?
Let's see if I can actually
remember all six of the topics.
We have a divorce, we have debt,
we have life events,
we have career change,
look ahead to cheat already
and mmm, mmm, mmm, mmm, mmm.
Change in plan with regard to retirement.
And then that brings us
to my last topic today,
which is maybe you're opening a business.
Maybe you have decided that
it is time to bet on yourself
and you are ready to
open your own business
and you're excited and you should be
and congratulations if
that's your situation.
But maybe now you're not in the position
to have a 10-year mortgage
like you have recently,
or currently having a 10-year mortgage.
Maybe you want to look
at a 15, 20, 25 or 30.
That would be another example of extending
(table tapping)
your mortgage term
where it might actually make
sense for you specifically,
even though it seems counterintuitive
to all the things that were taught.
Just remember, as I always say,
everything is case by case,
so in the perfect world its
you pay nothing, you get it for free,
in a perfect world, you get it for cheap,
in a perfect world, you
pay it back really fast.
But life is life and ultimately
peace of mind is absolutely everything.
Peace of mind is a little
bit more important sometimes
when you're having to choose
between those two things.
So do what is right for you.
Do what makes sense for
you, do your research,
know what you're getting
into, know the differences,
because when you're
extending your mortgage term,
you're going to pay more
money almost definitely
than you would have paid
with the shorter term.
And sometimes that's even if
the rates a little bit less,
so make sure that you know your numbers
and make sure you're making
a good educated guess.
So here's some tips on some things to ask.
When you're comparing
your current mortgage
and looking at extending your term,
you want to ask your loan officer,
"If I stay in my current
mortgage with a balance of X
at a rate of Y, with this many years left,
what will I repay on the mortgage?"
We have calculators where we can help you
calculate those kinds of things.
So let's make up a number
and say that's $100,000.
Okay, next, "Mr. Loan officer,
if I get a new loan and I extend my term
to 20, 25, 30-years, whatever,
at a rate of X at a new loan amount of Y,
then what will I be paying back
over that term to repay that money?"
So now let's say that is $105,000
compared to the a $100,000.
It's probably a lot more than that,
but again, there's so many
numbers we could calculate.
So that's just a general example.
So a $100,000 in comparison to 105,000.
Then you want to compare
and say, Mr. Loan officer,
"What is my monthly payment and
the two different scenarios"
And that way, again,
you're looking at detailed,
accurate numbers so
that you can be educated
and makes a decision of what is right
specifically for you and your case.
(air whooshing)
So what are my takeaways for you today?
My takeaways are almost always,
even if your rate is going to
be lower on the longer term
the longer term is going
to cost you more money
than the shorter term.
If you refinance, pulling cash
out, or no pulling cashout
there are expenses, aka clothes and cost
and also prepaid items
which aren't an expense,
but closing costs and prepaid items
and that's money that you're
gonna have to come up with
in the refinance so you
want to remember that
and take that into consideration as well.
Final takeaway, do what's right for you.
Don't let anybody judge you,
don't let anybody tell you what is right.
You know yourself, you know your plans,
you know your finances
and you know your budget.
So the biggest takeaway is be educated,
have the numbers, makes a decision
and do what is right specifically for you.
(air whooshing)
If you've enjoyed this video
and you would like more information,
I have a checklist for
that, actually it's a guide,
but you can click it in the link below.
And it's a guide that I'm
providing to you guys,
and what this is going to give you
is information on a few
things to think about
when you're considering a
15 versus a 30-year term.
Don't forget there's many
more than just 15 or 30,
but those are the two most common.
So that's the information
I'm putting in the guide
with the link below for you, enjoy.
(air whooshing)
Type piece in the comments below
if you think extending your
mortgage term is right for you.
(air whooshing)
Hopefully you've enjoyed this video.
I have put my heart, soul and passion
into these videos for you,
so hopefully you've enjoyed this video.
I would love a like,
pretty pleased, do a girl a favor.
Check out my other videos,
I'm going to post some links here
and let's connect on social media.
I'm on Facebook as Stephanie Weeks.
I am underscore
therealStephanieWeeks on Insta.
I've got a Twitter account
and of course, YouTube.
Thanks guys.
