Selecting a Refinancing Loan

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There are an enormous number of refinancing options available to borrowers. Call us and we can help you qualify for the right refinance loan program to fit your financial situation. There are several things to keep in mind while you look at your choices.

Making Your Payments Lower

Are your refinance goals to lower your rate and consequently your mortgage payments? In that case, applying for a low, fixed-rate loan might be a good option for you. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loans that you might want to refinance. Even when rates rise later, unlike with your ARM, when you close a fixed rate mortgage, you set the low interest rate for the life of your mortgage. If you plan to live in your home for about five more years, a loan with a fixed rate may be an especially good option for you. On the other hand, if you can see yourself moving within the next few years, an ARM mortgage with a small initial rate might be the ideal way to bring down your monthly payment. Due to refinancing, your total finance charges may be higher over the life of the loan.

Cashing Out

Are you refinancing primarily to pull out some of your home equity for an infusion of cash? Maybe you're planning a special vacation; you have to pay tuition for your college-bound child; or you are planning some home improvements. In this case, you will want to apply for a loan above the balance remaining of your existing mortgage.Then you want to qualify for a loan program for a higher number than the balance remaining on your current mortgage loan. You might not have an increase in your mortgage payment, though, if you have had your existing mortgage loan for a while, and/or your loan interest rate is high.

Debt Consolidation

Perhaps you hope to cash out some home equity (cash out) to put toward other debt. If you have enough home equity, taking care of other debt with rates higher than your mortgage (credit cards or home equity loans, for example) could be able to save you a lot of money each month.

Building up Equity Faster

Do you hope to build up equity quicker, and have your mortgage paid off more quickly? In that case, you need to look into refinancing to a short term mortgage loan - such as a fifteen-year loan. The mortgage payments will probably be higher than with the long-term mortgage loan, but in exchange, that you will pay quite a bit less interest and can build up equity quicker. Conversely, if your current longer term loan has a low remaining balance, and was closed a while ago, you might be able to make the switch without paying more each month. To help you figure out your options and the multiple benefits in refinancing, please contact us. We are here for you.