Which Refinancing Option is Right for You?
When you are overwhelmed with all the options, it may seem like there are even more loan programs than borrowers! Contact us at 719-331-6278 and we can match you with the refinance loan program that fits you best. What do you hope to achieve with refinancing? Considering in mind the following will help you narrow your choices.
Making Your Payments Lower
Is your refinance primarily to lower your rate and monthly payments? In that case, the best choice might be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loan programs that you might want to refinance. Unlike the ARM, your low fixed rate mortgage will stay at a certain low rate for the term of the mortgage loan, even when interest rates rise. If you expect to live in your home for at least five more years, a fixed-rate loan may be a particulary good fit for you. But if you do expect to sell your home more quickly, you will want to consider an ARM with a low initial rate to get lower payments.
Are you planning to cash out some of your equity in your refinance? Your house needs new carpet; your daughter has been accepted to college and needs tuition; or you have a special family vacation planned. In this case, you'll want to get a loan higher than the remaining balance on your current mortgage loan.With this goal, you'll want However, if your mortgage rate is high now and you have held it for a long time, you may be able to achieve your goals without an increase in your mortgage payment.
Do you want to cash out some of your equity to consolidate other debt? Great plan! 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 several hundred dollars in your monthly budget.
Paying it off Sooner
Do you want to build up equity more quickly, and have your mortgage paid off sooner? If this is your wish, your refinance can move you to a mortgage loan program with a shorter term, like a 15 year loan. The monthly payments will likely be higher than with a long-term mortgage loan, but in exchange, you will pay substantially less interest and will build up equity more quickly. However, if you have had your current 30-year mortgage for a long time and the remaining balance is rather low, you may be able to do this without raising your mortgage payment — it's even possible to save! To help you understand your options and the multiple benefits in refinancing, please call us at 719-331-6278. We are here for you.
Want to know more about refinancing your home? Call us: 719-331-6278.