Refinancing: Which Loan Program is for You?

There aren't as many loan options as there are applicants, but it seems like it sometimes! We can guide you to select the refinance loan program that will fit your situation the best. Contact us at (408) 626-1879 to get things started. There are some general questions to ask yourself while you look at your options.

Lowering Your Payments

Are your refinance goals to lower your rate and consequently your mortgage payments? If so, a good option could be a low fixed-rate loan. Perhaps you are now in a mortgage loan with a high, fixed interest rate, or a loan in which the rate of interest varies : an adjustable rate mortgage (ARM). Even when rates get higher later, unlike with your ARM, when you get a mortgage with a fixed rate, you set that low interest rate for the life of your loan. If you expect to live in your home for at least five more years, a fixed rate mortgage may be a particulary good choice for you. However, an ARM with a initial low payment may be a better way to reduce your payments if you see yourself moving in the next few years.

Getting Out some Cash

Is your refinance goal primarily to pull out some of your equity for an infusion of cash? Maybe you're planning a special vacation; you need to pay college tuition for your child; or you plan to renovate your home. With this in mind, you need to find a loan for more than the remaining balance on your existing mortgage.In this case, you want to qualify for a loan for a bigger amount than the balance remaining on your existing mortgage loan. However, if your interest rate is high now and you've held it for a long time, you may be able to achieve your goals without making your mortgage payments bigger.

Consolidating Debt

Do you want to cash out some home equity to consolidate additional debt? Good idea! If you own any 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 with your refinance, if you have enough equity.

Switching to a Shorter Term Loan

Are you hoping to fatten your home equity faster, and pay off your mortgage sooner? If this is your hope, the refinance loan can move you to a mortgage program with a short, like a 15 year loan. Your monthly payments will likely be more than they were with your long-term mortgage, but in exchange, you will pay substantially less interest and can build up equity more quickly. Conversely, if your current long-term mortgage has a small balance remaining, and was closed a number of years ago, you may even be able to make the change without paying more each month. To help you understand your options and the multiple benefits of refinancing, please contact us at (408) 626-1879. We would love to help you reach your goals!

Want to know more about refinancing? Call us at (408) 626-1879.

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