Refinancing: Which Loan Program is for You?
There are not as many refinance loan programs as there are borrowers, but at times it feels like it! We can guide you to select the refinance program that will fit your needs the best. Call us at (909) 467-1090 to get things started. There are several things to keep in mind while you review the choices.
Lowering Your Payments
Are getting reduced mortgage payments and an improved rate your main reasons for refinancing? If so, a good option might be a low fixed-rate loan. Maybe you now hold a higher rate fixed rate mortgage, or maybe you hold an ARM — adjustable rate mortgage — where the interest rate can vary. Unlike the ARM, your low fixed-rate mortgage stays at a certain low rate for the term of the loan, even when interest rates rise. This kind of loan can be particularly a good option if you don't think you'll be selling your home within the next five years or so. However, an ARM with a low intitial payment may be a better way to lower your monthly payments if you plan on moving within the near future.
Refinancing to Cash Out
Are you hoping to cash out some of your home equity in your refinance? It could be you're going on a much needed vacation; you have to pay college tuition for your child; or you plan to renovate your home. With this in mind, you will need to qualify for a loan for more than the balance remaining on your current mortgage.Then you want to qualify for a loan program for a higher number than the remaining balance on your current mortgage. You might not have an increase in your mortgage payemnt, though, if you have had your existing mortgage loan for a while, and/or your loan interest rate is high.
Do you hold other debt, perhaps with high interest, that you need to consolidate? If you have the equity in your home for it, paying off other debt with higher interest than the rate on your mortgage (for example: credit cards, home equity loans, or car loans) means you can possible save hundreds of dollars in your monthly budget.
Paying it off Faster
Do you plan to build up equity quicker, and pay off your mortgage faster? If this is your hope, your refinance loan can change you to a loan program with a shorter term, like a 15 year loan. Your mortgage payments will probably be more than they were with a long-term mortgage, but the pay-off is: that you will pay substantially less interest and can build up equity more quickly. However, if you've held your current thirty-year mortgage loan for a number of years and the loan balance is rather low, you may be able to do this without increasing your monthly mortgage payment — it's even possible to save! To help you determine your options and the numerous benefits in refinancing, please call us at (909) 467-1090. We would love to help you reach your goals!