Which Refinancing Loan Program is Right for You?
When you are overwhelmed with all the choices, it may seem as if there are even more refinance loan programs than borrowers! Call us at (760)789-9995 and we will help you qualify for the right refinance loan for your financial needs. What are your goals for refinancing? Keeping in mind the following will help you begin your decision process.
Making Your Payments Lower
Is your refinance primarily to lower your rate and monthly payments? If so, getting a low, fixed-rate loan might be a wise choice for you. Perhaps you now hold a fixed-rate mortgage with a higher rate, or maybe you hold an ARM — adjustable rate mortgage — where the interest rate varies. Unlike the ARM, your low fixed-rate mortgage stays at a certain low rate for the term of your mortgage, even as interest rates rise. If you aren't planning a move in the near future (about 5 years), a fixed rate mortgage loan can particularly be a great choice. 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 mortgage payments.
Refinancing to Cash Out
Are you refinancing mainly to "cash out" some home equity? Your house needs renovating; your daughter has gone to college and needs tuition money; or you are planning a special vacation. With this in mind, you will want to get a loan for more than the balance remaining of your existing mortgage.So you want to qualify for a loan program for a higher number than the balance remaining on your existing mortgage loan. However, if your interest rate is currently high and you've held it for quite a few years, you could be able to reach your goals without an increase in your mortgage payment.
Do you want to pull out a portion of your home equity to consolidate additional debt? Yes you can! If you own some higher interest debts (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 the home equity built up to make it work.
Switching to a Shorter Term Loan
Do you hope to build up equity more quickly, and pay off your mortgage sooner? You should consider refinancing to a short-term loan, often a 15-year mortgage. Although your mortgage payment amount will likely be more, you will save on interest; so your home equity will rise up faster. However, if you have had your existing 30-year loan for a number of years and the remaining balance is rather low, you could be do this without raising your monthly payment — you might even be able to save! To help you understand your options and the multiple benefits in refinancing, please call us at (760)789-9995. We would love to help you reach your goals!