Refinancing: Which Option is for You?
There aren't as many refinance loan programs as there are borrowers, but it feels like it sometimes! We can guide you to locate the loan program that will fit your financial situation the best. Call us at (408) 626-1879 to get things started. There are some general questions to ask yourself as you look at your options.
Lowering Your Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? Then the best option could be a low fixed-rate loan. Maybe you currently have a higher rate fixed rate mortgage, or maybe you have an ARM — adjustable rate mortgage — where the interest rate can vary. Unlike the ARM, your low fixed rate mortgage will stay at a certain low rate for the life of the mortgage loan, even when interest rates rise. If you are planning to stay in your home for at least five more years, a loan with a fixed rate may be a particulary good fit for you. However, an ARM with a low intitial payment could be a wiser way to lower your payments if you see yourself moving in the next few years.
Getting Out some Cash
Is "cashing out" your main reason for your refinance? It could be you're dreaming of a cruise; you need to pay tuition for your college-bound child; or you are planning some home improvements. In this case, you will want to find a loan higher than the remaining balance on your current mortgage.Then you'll want to need to get a loan program for a higher number than the balance remaining on your present mortgage loan. However, if your interest rate is currently high and you have held it for quite a few years, you could be able to accomplish your goals without making your monthly payments bigger.
Consolidating Your Debt
Do you want to pull out some home equity to consolidate additional debt? Good plan! If you hold some debt with higher interest (like credit cards or car loans), you may be able to take care of that debt with a lower rate loan through your refinance, if you have the right amount of equity.
Getting a Shorter Term Loan
Are you planning to fatten your equity faster, and get your mortgage paid off more quickly? If this is your goal, the refinance loan can change you to a loan program with a shorter term, like a 15 year loan. You will be paying less interest and growing your equity more quickly, even though your payments will usually be bigger than they were. However, if you have held your existing 30 year mortgage loan for a number of years and the remaining balance is rather low, you could be able to do this without raising your monthly mortgage payment — it's even possible to save! To help you understand your options and the numerous benefits in refinancing, please contact us at (408) 626-1879. We are here for you.
Curious about refinancing your home? Call us at (408) 626-1879.