Refinancing: Which Option is for You?

Although it may seem like it sometimes, there are not as many loan programs as there are applicants! We can guide you to select the refinance program that can fit your situation the best. Call us at (408) 626-1879 to get started. What do you hope to achieve with your refinance loan? Keeping in mind the information below will help you begin your decision process.

Reducing Your Monthly Payments

Are achieving reduced mortgage payments and a better rate your main reasons for refinancing? In that case, a low, fixed rate loan may be your best option. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loans that you might want to refinance. Unlike the ARM, your low fixed-rate mortgage stays at a certain low rate for the life of the mortgage, even when interest rates rise. A fixed-rate mortgage is especially a good choice if you don't think you will sell your home within the next five years or so. But if you do expect to sell your home more quickly, you should consider an ARM with a low initial rate in order to achieve reduced monthly payments.

Getting Out some Cash

Are you refinancing mainly to "cash out" some home equity? Your house needs new carpet; your daughter has gone to college and needs tuition; or you have a special family vacation planned. In this case, you'll need to find a loan above the balance remaining of your current mortgage.In that case, you You'll be looking for a loan for a higher amount than the remaining balance on your current mortgage in this case. You might not increase your mortgage payemnt, though, if you've had your existing mortgage loan for a number of years, and/or your loan interest rate is high.

Consolidating Debt

Do you want to pull out a portion of your home equity to consolidate other debt? Great plan! If you have some higher interest debts (like credit cards or car loans), you might be able to take care of that debt with a lower rate loan with your refinance, if you have the right amount of equity.

Switching to a Shorter Term Loan

Do you want to build up equity more quickly, and pay off your mortgage sooner? If this is your hope, your refinance loan can change you to a loan program with a short, like a 15 year loan. Even though your monthly payments will probably be increased, you will be paying less interest; so your equity amount will rise up faster. However, if you have held your current thirty-year mortgage for a long time and the remaining balance is rather low, you may be able to do this without raising your monthly payment — it's even possible to save! To help you determine your options and the multiple benefits in refinancing, please call us at (408) 626-1879. We are here for you.

Want to know more about refinancing? Give us a call: (408) 626-1879.

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