Refinancing: Which Loan Program is for You?
The huge number of refinance options available can be overwhelming. We can guide you to find the loan program that will fit your situation the best. Contact us at (877) 226-8191 to get started. What do you hope to achieve with refinancing? Keeping in mind the following will help you narrow your choices.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? Then the best choice may be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loans that you might want to refinance. Even if interest rates rise, a fixed-rate mortgage will stay at the same, low interest rate, unlike an ARM. If you aren't planning on moving in the near future (about 5 years), a fixed rate mortgage loan can particularly be a great option. However, an ARM with a initial low payment may be a better way to lower your payments if you expect to move in the next few years.
Refinancing to Cash Out
Are you planning to cash out some of your home equity with your refinance? It could be you need to update your kitchen, take care of your college kid's tuition, or take your dream vacation. So you will want to look for a loan above the balance remaining on your existing mortgage loan.So you will want to find a loan program for a bigger amount than the remaining balance on your current mortgage. You may not increase your mortgage payemnt, though, if you've had your existing mortgage loan for a while, and/or your loan interest rate is high.
Consolidating Your Debt
Do you have other debt, maybe with a higher interest rate, that you want to consolidate? If you have the home equity for it, paying off other debt with higher interest than the rate on your mortgage (for example: car loans, credit cards, student loans, or home equity loans) means you can save possibly hundreds of dollars per month.
Switching to a Shorter Term Loan
Do you want to build up equity more quickly, and have your mortgage paid off more quickly? If this is your goal, the refinance can move you to a loan program with a shorter term, for example: a 15 year loan. Your monthly payments will likely be more than they were with the longer term mortgage loan, but in exchange, that you will pay substantially less interest and will build up equity quicker. But, you may be able to switch without much increase in your monthly payment if your longer term loan was closed a while ago, and the remaining balance is low enough. You could even pay less! To help you understand your options and the multiple benefits in refinancing, please contact us at (877) 226-8191. We are here for you.
Curious about refinancing your home? Give us a call: (877) 226-8191.