Which Refinancing Loan Program is Best for You?

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Even though it may seem like it sometimes, there are not as many loan options as there are borrowers! Call us at 651-426-1988 and we will help you qualify for the right refinance loan program to fit your situation. There are several questions to ask yourself while you review your options.

Reducing Your Monthly Payments

Are getting lower monthly payments and a better rate your main reasons for refinancing? In that case, a low, fixed rate loan may be your best option. Maybe you currently hold a higher rate fixed rate mortgage, or perhaps you hold an ARM — adjustable rate mortgage — in which the rate of interest can vary. Even when interest rates rise, a fixed-rate mortgage loan will remain at the same, low interest rate, unlike an ARM. This is particularly a wise choice if you aren't planning a move within the next 5 years or so. However, an ARM with a low intitial payment could be a wiser way to reduce your monthly payments if you plan on moving in the near future.

Refinancing to Cash Out

Is your refinance goal mainly to pull out some equity for an infusion of cash? Your home needs renovating; your daughter has been accepted to University and needs tuition; or you are taking your family on a cruise. Then you want to look for a loan above the balance remaining of your present mortgage loan.With this goal, you'll want to find a loan for a higher amount than the remaining balance on your existing mortgage. You might not have an increase in your monthly payemnt, however, if you have had your current mortgage for a while, and/or your interest rate is high.

Consolidating Your Debt

Perhaps you'd like to pull out some of the equity in your home (cash out) to put toward other debt. If you have the home equity for it, paying off other high interest debt (for example: car loans, credit cards, student loans, or home equity loans) means you can possible save several hundred dollars in your monthly budget.

Getting a Shorter Term Loan

Do you hope to build up equity more quickly, and have your mortgage paid off more quickly? If this is your goal, the refinance mortgage can change you to a mortgage loan program with a short, for example: a 15 year loan. The mortgage payments will probably be higher than they were with your longer term mortgage loan, but the pay-off is: you will pay considerably less interest and can build up equity quicker. However, if you've had your existing 30-year mortgage for a long time and the remaining balance is rather low, you may be do this without increasing your monthly mortgage payment — it's even possible to save! To help you determine your options and the many benefits in refinancing, please call us at 651-426-1988. We would love to help you reach your goals!

Curious about refinancing? Give us a call: 651-426-1988.