Ask 10 different mortgage experts what the future of 30-year fixed rates looks like, and you'll get 10 different answers. From the latest deadly virus to the uncertain trajectory of the US political climate, there seems to be an endless list of potential causes for our inevitable economic doom. Rates have been under 4% since June 2019, but since we aren't certain which straw will break the proverbial camel's back, let's focus on what we know -- rates are LOW. What does this mean for the average homeowner? Refinance.

Cash-out, or rate-and-term -- What's the Difference?

Cash-Out refinances allow you to trade your home equity for cash. At closing, your existing mortgage is paid off, the closing costs are paid, and the remaining funds are given to the borrower. Common uses for cash-out refinances include:

  • home improvements

  • paying off student loan debt

  • paying off high-interest debt, such as credit cards, car loans, etc.

  • much needed vacation

One thing to remember about cash-out refinances is that it is not free money. For all intents and purposes, you're borrowing money from yourself in order to make a purchase or pay off debt.

Rate-and-term refinances allows borrowers to replace an existing mortgage with one that has a lower rate or more favorable term. Rate-and-terms are most often used by borrowers who have owned their home for more than a year however, sometimes plans change and borrowers refinance as soon as six months after their purchase. Has your home increased in value since you've bought it? You may be sitting on more equity than you think; a rate-and-term refi might allow you to get rid of that Mortgage Insurance payment!

A common question when talking to potential borrowers about refinancing is, "Have you lived in your home for more than a year?" This gives us a better idea as to what their current rate might be or how much equity they may have. After all, we wouldn't want you to go through the whole process of refinancing if it will end up costing you money in the long run!

Whether you've got debt that needs to be paid off or just a fear of missing out on the low rates, I encourage you to speak with your local Sovereign Mortgage loan originator. Save yourself time, money, and future headaches by speaking with a mortgage professional about your home loan options.

Doug Kennell

Sr.BranchManager, LoanOriginator




  • FinanceByDoug

What is a Jumbo Loan:

Jumbo loans let you borrow more than the conventional loan limit for your area -- $484,350, or $726,525 for high-cost areas -- in order to purchase a home that’s priced above average. Although Jumbo loans let you finance more, they have stricter requirements as a means of risk management for the lender.



  • Buy in cash.

  • Veterans and other eligible borrowers can obtain VA loans beyond conventional limits unless the borrower is doing a 0% down mortgage. When a down payment is provided, VA loans do not have a set limit. (Positive changes coming in early 2020 for VA loans.)

  • Conventional High Balance loan limit for single-family is $726,525 and for a 2 family $930,300. Maximum DTI is 43% and 2 years tax returns required.

Good options are limited when it comes to mortgage loans on high-priced homes, which is a blessing in disguise. Jumbo loan guidelines prevent borrowers from purchasing more house than they can afford.

Other Notes:

The Tax Cuts and Jobs Act of 2017 decreased the amount of debt from which mortgage interest could be deducted, from $1million to $750,000 (the House bill had it reduced to $500,000). Given that personal deductions were increased and that borrowers considering Jumbo loans have a good-sized savings, this shouldn’t weigh too heavily on the mind of the borrower.


Rates, regulations, and loan conditions can and do change. The information presented in this article was accurate, to the writer’s knowledge, as of 11/20/2019.Consult your Sovereign Mortgage Investments Inc. advisor to see if rates, regulations, and loan conditions have changed.

  • FinanceByDoug

Updated: Nov 21, 2019

FHA loans - named after the government institution that insures them, the Federal Housing Administration - are one of the more commonly used loan programs among US home-buyers today. By providing opportunities for borrowers who otherwise would not have a home loan option, it has become a standard for buyers in need of a low down payment or those with less-than-average credit. The FHA loan requires just 3.5% down with a credit score of at least 580, and allows borrowers to use “gift” funds to pay for the entire down payment.

In today’s housing market, where many first-time home-buyers have significant student loan debt, it is no wonder why people are turning more towards low-down options. However, the lower credit and down payment requirements are offset by additional premiums not included with conventional home loans. A 1.75% Upfront Mortgage Insurance Premium (paid at closing) and annual 0.45% to 1.05% Mortgage Insurance Premium (MIP) are both included on FHA loans. Unlike the conventional loan's Private Mortgage Insurance, which is automatically canceled at 78% loan-to-value (LTV) , FHA loans include a MIP throughout the life of the loan.

Weigh the benefits and drawbacks with consideration to your personal financial situation. Is now the right time to buy? Would it make more sense to wait and save for a larger down payment to avoid additional fees?

When you’re ready, give us a call. We’d be to discuss your options with you.



Rates, regulations, and loan conditions can and do change. The information presented in this article was accurate, to the writer’s knowledge, as of 9/12/2019.Consult your Sovereign Mortgage Investments Inc. advisor to see if rates, regulations, and loan conditions have changed.

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Douglas Kennell

NMLS #364758

Sovereign Mortgage Investments, Inc.

NMLS #222681

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(239) 542-6224

Cape Coral, FL 33904