Refinancing: Which Option is for You?
Even though it may seem like it sometimes, there aren't as many refinance loan programs as there are borrowers! Contact us at (650) 689-5684 and we'll work with you to qualify you for the perfect loan program for your financial needs. There are some general things to bear in mind while you look at your choices.
Lowering Your Payments
Is your refinance primarily to lower your rate and monthly payments? If so, your best option may be a low fixed-rate loan. Maybe you are currently in a mortgage loan with a high, fixed interest rate, or a mortgage loan in which the interest rate varies : an adjustable rate mortgage (ARM). Different that the ARM, your low fixed-rate mortgage will stay at a certain low rate for the life of your loan, even as interest rates rise. If you are not expecting to sell your home in the near future (about 5 years), a fixed-rate mortgage can particularly be a wise loan option. On the other hand, if you can see yourself moving within the next few years, an ARM with a small initial rate may be the ideal way to lower your monthly payments.
Getting Out some Cash
Is your refinance goal mainly to "cash out" some home equity? It could be you're dreaming of a cruise; you need to pay college tuition for your child; or you are planning some home improvements. With this in mind, you need to get a loan above the balance remaining on your current mortgage.So you'll want to find a loan for a bigger amount than the remaining balance on your current mortgage. If you've had your current mortgage loan for a long time and/or have a mortgage loan with a high interest rate, you might\could be able to do this without increasing your monthly payment.
Consolidating Your Debt
Do you have other debt, perhaps with a high interest rate, that you want to consolidate? If you have enough equity, paying off other debt with higher interest that your mortgage loan (credit cards or home equity loans, for example) may help save you a lot of cash each month.
Getting a Shorter Term Loan
Do you plan to build up equity more quickly, and pay off your mortgage more quickly? You should consider refinancing to a shorterterm loan, like a 15-year mortgage loan. Although your monthly payment amount will usually be more, you can save on interest; so your equity amount will build up faster. However, if you have held your existing thirty-year mortgage for a number of years and the loan balance is relatively low, you might be able to do this without raising your monthly mortgage payment — you may even be able to save! To help you figure out your options and the numerous benefits in refinancing, please call us at (650) 689-5684. We are here for you.
Curious about refinancing your home? Give us a call at (650) 689-5684.