Refinancing: Which Loan Program is for You?

The huge number of refinance options available to borrowers can be overwhelming. Contact us at (866) 990-3838 and we will match you with the loan program that best fits you. There are several things to keep in mind as you consider the options.

Lowering Your Payments

Is your refinance primarily to lower your rate and monthly payments? If so, the best option might be a low fixed-rate loan. Maybe you currently hold a higher rate fixed rate mortgage, or perhaps you hold an ARM — adjustable rate mortgage — where the rate of interest can vary. Even when rates get higher later, unlike with your ARM, when you get a fixed-rate mortgage, you set that low rate for the term of your mortgage. If you aren't planning on moving in the near future (about five years), a fixed rate mortgage loan can especially be a good option. However, an ARM with a initial low payment may be a wiser way to reduce your payments if you see yourself moving in the near future.

Refinancing to Cash Out

Is "cashing out" your primary purpose for refinancing? It could be you're planning a special vacation; you need to pay college tuition for your child; or you plan to renovate your home. In this case, you will want to get a loan for more than the remaining balance of your current mortgage loan.So you'll want to find a loan program for a higher amount than the remaining balance on your current mortgage. If you've had your current mortgage for a long time and/or have a high interest mortgage, you may be able to do this without increasing your mortgage payment.

Consolidating Debt

Maybe you hope to cash out a portion of the equity in your home (cash out) to put toward other debt. If you hold some debt with high interest (such as credit cards or car loans), you may be able to take care of that debt with a loan with a lower rate through your refinance, if you have enough equity.

Paying it off Sooner

Are you dreaming of paying off your loan more quickly, while beefing up your home equity more quickly? You should consider refinancing to a short-term loan, often a 15-year mortgage. You will be paying less interest and growing your equity faster, although your monthly payments will generally be higher than they were. On the other hand, if your current long-term mortgage loan has a small remaining balance, and was closed a while ago, you could be able to make the change without paying more each month. To help you determine your options and the multiple benefits in refinancing, please contact us at (866) 990-3838. We are here for you.