Kelli Green: 0:00

Welcome back to an episode of the Live Better podcast with Centric. I’m your host and Centric Senior Vice President of Marketing, Kelli Green. I’m so excited that you’re here. Every month we post a new episode where I’m joined by an expert guest to chat about finances and all things living better. Subscribe today so that you never miss an episode. And today we are joined by Laura Hawthorne. She is our Chief Consumer Lender right here at Centric. She’s joining us to discuss benefits of a refinance and when to consider this as a financial solution. So good morning, laura. It’s a very special day for us. We are celebrating the birth of Laura, and she has been just such a great friend to us and an expert here at the credit union and has served many of our members for how many years? 20, 25 years. I love it Well, so you are not a new guest, so to speak, to our podcast, but we may have some new listeners, so if you would maybe just share with us a few things about yourself personally and professionally, sure.

Laura Hawthorne: 1:08

Well, like we mentioned a while ago, I’ve been with Centric for 25 years. I’ve been, I’ve worked in pretty much every department that credit union has. My husband and I have been married for 22 years.

Kelli Green: 1:27

So you mean your relationship with Centric is longer than the one with your husband?

Laura Hawthorne: 1:32

If you count marriage. I have two girls 19 and 16, which there could be all kinds of stories and we don’t have time for all that today. But yeah, I really like what I do. I love the people that I work with and Centric has been really good to me.

Kelli Green: 1:47

You know you’re talking about being a mom and a wife. You know, check back with us next time when we do a parenting and family podcast, because I know you can share all kinds of neat things with raising two teenage girls at the same time. So many of us would benefit from that for sure. So let’s just jump into our topic today, because we recognize you know too that we’ve heard a lot of buzz about the Fed dropping rate, which they did. And then you go and look at the 30-year mortgage, which just jumped up a half a point.

Laura Hawthorne: 2:18

That’s kind of surprising. Didn’t expect that.

Kelli Green: 2:20

Right.

Kelli Green: 2:20

And so we were not expecting that in the slightest. And do you think, maybe, potentially, that with the election that’s coming up, that that may have something to do with it? Or really, what posed the necessity

Laura Hawthorne: 2:33

I really, I mean, they always say that the election is gonna effect rates in some form or fashion. It’s always a battle, but they kind of went back up a little bit because they dropped and because demand probably flooded while everybody’s been waiting for them to drop, right, so then they did drop. Everybody’s running to, buy their new home. And I just think that’s probably what kind of caused the rates to bump back in the other direction.

Kelli Green: 3:16

Such a shift. I think I read and so I can put this in the show notes, but one of the things I was looking at there was a statistic from a financial expert that posted the average home in the entire nation. Now, this is not localized to our area, but when you think about you know the rates being anywhere from 6.75 to 8% in some cases and you look at that, the average home is like selling for 450, which puts your mortgage at right around $33,000 to $3,500 a month. When you think about insurance, and so it’s just it’s almost impossible for average families today to really be a homeowner.

Laura Hawthorne: 3:57

It really is. It really really is.

Kelli Green: 3:59

So what are some things here at Centric, maybe, that we offer in that regard? You know, that might be something that could be beneficial to our first-time homebuyers, or even somebody who might be in the market If that were you and just I know this is just an opinion what is something that you might recommend to someone who’s really thinking about? You know, seeing as being a homeowner is like the financial dream, you know.

Laura Hawthorne: 4:21

Well, first thing you should do is come in and talk to one of our financial counselors or one of our mortgage team members. The mortgage team members can really line out all the steps that go into one borrowing the funds what type of rates you’re going to have. Are you going to have closing costs? What are those closing costs? You know average or you know approximately? Come up to? What does insurance look like? What are property taxes looking like? How much of a mortgage can you afford? And then what the rate has been doing in the market, whether or not it’s been slowly going down. And do we want to wait a little bit longer to try and get the lowest rate that we can? Or is now a good time to lock if we’re really sure that this is where we want to be, because there’s a chance they could go back up?

Kelli Green: 5:12

That’s right that’s why a lot of people talk about, you know, the adjustable rates and is that something to really consider, I would say, in this market? It’s scary, you know. I don’t know that I would go in that direction, but just thinking about it, you know, is how can someone really prepare? And if, if they’re maybe thinking, maybe consider a time that’s a little less volatile, but everybody’s situation is a little different, you know, if you’re looking for maybe a smaller home and you’ve got, you’ve saved up a great, you know, 20%, this might be something that’s okay for you and you can always refinance.

Kelli Green: 5:45

That’s something that you know we’ve really really wanted to share and talk about specifically today. Certain that you know we’ve really really wanted to share and talk about specifically today. But just with the recent increase as far as that 30-year mortgage rate, those are some things I really wanted to kind of call out this morning as we’re talking about it. But there has been a buzz from the consumer side where the rates have dropped a little bit, and here at the credit union we know that we are very much known for lower auto, rv and any rates, essentially from a consumer standpoint. So we’re thinking about that when we’re thinking, okay, how do we know if a refinance is good for us?

Laura Hawthorne: 6:24

Number one know what your current rate is. So is the rate better for you or is it still a little bit on the high side compared to where you already are? So just kind of understanding that, I think, is initially the key. Second thing is is when you start talking about refinancing, you know, are you looking for a lower rate so you pay less in interest, or you look for a lower payment because you want to create cash flow? Those can come, you know those are two separate things for two separate reasons. Creating cash flow can be done in a multipulsive way. You know, if there’s a drastic dip in your interest rate that can create a lower monthly payment. If you decide to refinance but extend the original term back out, you know, to give you a little bit of flexibility in just in the monthly cash flow, you can do that. But you have to be kind of cautious and really know what it is that you’re looking for, Because if you extend that term back out you’re just going to pay in interest, that’s right.

Laura Hawthorne: 7:22

So do you want to pay an interest over the long term or do you want to pay more in interest now? Just kind of really understanding what your goal is is key an interest now.

Kelli Green: 7:31

Just kind of really understanding what your goal is is key. So just to kind of recap that you know and understanding if a refinance is really the best option for you is first knowing what interest rate that you’re paying. And a lot of our members, whenever they are searching for a vehicle or they’re inquiring about a purchase for anything really, it is what is my payment. A purchase for anything, really it is what is my payment. And that, unfortunately, is a driver for a lot of Americans, because cash flow, as you mentioned, is something that managing your budget from month to month or between paycheck to paycheck. We’re stretched even more so than we’ve probably been in a very long time.

Laura Hawthorne: 8:06

Right now, that’s super key. Everything costs more and as prices for just your normal daily needs go up, your cash flow gets tighter, and you haven’t even touched your car payment yet.

Kelli Green: 8:20

And it’s wild, and so we’re thinking about. You know, we’ve got the holidays and when we have other expenses too, when students go back to school, those are usually two of the most costly expenses throughout the year, and people are constantly looking for ways in which they can make ends meet or achieve this. You know, expense for their child or if it’s an emergency, people will find a way, no matter what that might cost them. So one of the things I really want us to think about, too, is if you are finding yourself in a situation where you have more month left out of your paycheck, then we really need to consider visiting with one of our financial counselors which is free and understanding. We can retrieve a full credit report, which at that time, they have that opportunity to review what interest rate people are paying on each individual responsibility or financial commitment, and the best way to do that is just taking a look at it and speaking with that.

Kelli Green: 9:20

Debt consolidation is an option. Yes, that’s a lot of times and just so for people who are listening, what is a debt consolidation and maybe you know how might you even get started with that? It’s really just combining multiple payments into one. That’s correct. So to recap. Really, what you’re talking about is knowing your rate and understanding what is your motive when you’re considering a refinance. That is the key. So for our folks who might be considering and saying you know, this is something that I might want to think about, because if I can refinance to give me more cash throughout the month, you want to have the understanding where you might actually end up. If you’re extending that term, you’ll be paying more for that auto or that collateral, whatever that is. You’ll be paying more for that in the long run. Yes, so that’s why, when a lot of our members mention that they’re so payment driven, it kind of makes our loan officers think oh, what do you feel?

Laura Hawthorne: 10:17

Well, we want to put the member in the best situation. You know our job, and we’ve said this before our job is to help you pay less yes, not pay more. So, really just truly understanding the motive and the need for that particular member and driven to ask these questions, what are we really looking for? And making sure that we build that for them to the best that’s going to benefit them the best.

Kelli Green: 10:53

Oh, yeah, and sometimes a refinance can be great, you know, when you’re thinking about that there’s also different options too.

Kelli Green: 11:01

As far as the refinance is concerned, it’s just I think it’s so great and especially as this timeliness and when we know, actually in the timeframe of this particular podcast, you think about retrieving a credit report and doing an overall financial assessment, this is a really good time to do that.

Kelli Green: 11:19

So just to get an actual review of your credit report will allow you the opportunity just to see exactly what you owe, who you owe and really what’s being reported. Is it accurate? Is that timely? You know, we really want to make sure that our members are aware of what is exactly being posted. So really and truly thinking about as far as refinancing to lower monthly payments, so really and truly thinking about as far as refinancing to lower monthly payments, that really could be a priority for so many people. And in your recommendation, just as we’re kind of wrapping up some of the things that we’ve been talking about, if someone is really considering a refinance just to kind of allow their budget to air out just a little bit, what’s the first thing they should do? Come in and talk to us.

Laura Hawthorne: 12:02

Yeah, come talk to one of our experts. We have 60 plus financial counselors. They can get you started and then, as we determine what those particulars are, we can pair you with another expert that is in that field.

Kelli Green: 12:15

Yeah.

Laura Hawthorne: 12:15

So yes, please come see us first.

Kelli Green: 12:18

Yeah, and the other thing too if you’re even thinking about a brand new purchase, consider talking about a pre-approval first. Absolutely. We also even have a tool for you to shop if you’re looking for a vehicle.

Laura Hawthorne: 12:30

Yes, we do A lot of dealerships and you can extend that radius to several hundred miles. Oh yeah, because sometimes the best deal is sometimes found out of town. It is.

Kelli Green: 12:41

And you know the one thing. You know, we always really try to push for folks to purchase things locally and when you are able to see if there is a new to you, new or used vehicle that might be outside of the market, share that information with local dealers and say, hey, here’s what I’m having. You know what is available to me. I’d really love you know to do my business here. But the first thing is to really and truly secure your financing and to do that here at Centric Because, as we know that credit unions have much lower interest rates when you compare those to the national average, and I encourage you as a consumer any of our listeners to really take a look at that before you just pull the trigger. I know that nice new car smell is great, but in this particular environment is it something that, if you kind of like your car and you know it’s in really good shape right now, might be a good time for you to say you know what? I’m going to maintain this vehicle.

Laura Hawthorne: 13:36

That new car smell doesn’t last as long as that payment.

Kelli Green: 13:39

That’s exactly right and you think about okay, let me maintain what I have and then consider if you do need to air out your payments a little bit just to give you a little bit of room in your monthly budget. A refinance might be something that is available to you. And one of the final things that I wanted to share and not everyone, it’s kind of rare, but I have seen it happen. It’s just a cash out options.

Laura Hawthorne: 14:01

They do exist, but they’re few and far between Well, especially when you’re dealing with vehicles, because values of vehicles fluctuate so volatile I guess it’s really the word you know. They were very high during COVID, right after COVID, just due to demand and then lack of supply. And now that the supply is starting to build back up, the value isn’t because the demand for the vehicles is not as great, Right. So you kind of have to be careful in those. Most of your cash out options are really going to come from your mortgage refis or potentially a HELOC. That’s right If you’re needing funds for a particular project situation.

Kelli Green: 14:46

And again, there are options and ways in which you can just speak to an expert. If you’re looking at, maybe cash out or refinance in another, you know, in for a vehicle or what have you you want to think about, would we speak to a consumer lender or would we speak to a mortgage lender? And there’s a multitude of ways that you can reach them. It’s either by phone, text, in person, online submission really works too. There’s so many ways that our folks can really get in touch with someone if they maybe aren’t available, where they can come in. So that’s something we really want to think about too. So, but nonetheless, I just really want to. You know, certainly. Thank you so much, though, laura, too, for coming in, and just as we’re wrapping up, is there potentially anything else that you want to share to our listeners, who may be a member or maybe not be a member, but they’re just really interested in looking at one? Is a refinance really right for me?

Laura Hawthorne: 15:42

Well, again, I’ll just say come talk to us, come talk to one of our many experts and let us sit down and really go through what your goals are, what your thoughts are, and then we can line out what options may be available to you. Perfect, I love it.

Kelli Green: 15:59

Well, everyone, we just thank you so much for joining us, just as we really kind of wrap up and talk about a couple things. That we’re discussing today is really understanding knowing your rate that you’re currently paying and is there a lower rate? That we’re discussing today is really understanding knowing your rate that you’re currently paying and are is there a lower rate that you might qualify for, and that’s something to really think about. You could refinance and maintain your term if you have a lower rate and you’re not extending that payment. That’s something that you really that would be the best case scenario, honestly, and if you could ever shorten your term where you can, you know, really afford if you have a few extra dollars that it allows you to pay that off so much sooner, which means you’re paying less overall, your future self. Well, thank you, yes.

Kelli Green: 16:39

So nonetheless, though, we have options that are available for folks, and here’s the thing if you’re not qualifying today for a lower interest rate, or if perhaps, you come in and you speak with someone and maybe those lower interest rates are just not available for you today, give us a chance to talk through and what are some things that you can do to help improve your overall credit score. So thank you all so much for listening to our podcast and tune back in next month for another episode of our Live Better podcast with Centric. Don’t forget to subscribe to Live Better podcast on your favorite podcast platform and to ensure you never miss out on helpful tips. Like us on Facebook at Centric Federal Credit Union and find us at MyCentric on Instagram, Pinterest, TikTok and YouTube. You can find more information about today’s topic, our monthly blog and more at MyCentricorg. Centric is federally insured by the NCUA.