Refinancing: Which Program is for You?
When you are overwhelmed with all the choices, it may seem as if there are even more refinance programs than applicants! Call us at (408) 626-1879 and we can help you qualify for the best refinance loan for your financial situation. In order to review your choices, you should consider what you want to achieve with your refinance.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? In that case, your best choice could be a low fixed-rate loan. Perhaps you are presently in a loan with a high, fixed interest rate, or a loan in which the interest rate varies - an adjustable rate mortgage (ARM). Unlike the ARM, your low fixed-rate mortgage will stay at a certain low rate for the life of your mortgage loan, even as interest rates rise. A fixed-rate mortgage can be particularly a good choice if you aren't planning a move within the next five years or so. However, an ARM with a initial low payment could be a smarter way to reduce your monthly payments if you plan on moving in the next few years.
Refinancing to Cash Out
Is "cashing out" your primary purpose for your refinance? Maybe you need to update your kitchen, take care of your college kid's tuition, or take a cruise. Then you need to qualify for a loan above the balance remaining on your present mortgage.Then you'll You will be looking for a loan for a bigger amount than the current balance of your present mortgage in this case. You may not increase your monthly payemnt, though, if you've had your current mortgage for a long time, and/or your interest rate is high.
Consolidating Your Debt
Do you have other debt, maybe with higher interest, that you want to consolidate? If you own any higher interest debts (like credit cards or car loans), you may be able to pay that debt off with a lower rate loan through your refinance, if you have the right amount of home equity.
Paying it off Sooner
Are you dreaming of paying off your loan more quickly, while beefing up your home equity faster? You should consider refinancing to a short-term loan, such as a 15-year mortgage. The payments will likely be more than with your long-term loan, but the pay-off is: you will pay quite a bit less interest and will build up equity more quickly. Conversely, if your current longer term loan has a low balance remaining, and was closed a while ago, you may 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 at (408) 626-1879. We are here to help you reach your goals!
Want to know more about refinancing your home? Give us a call at (408) 626-1879.