Refinancing: Which Loan Program is for You?

There are a huge number of refinancing programs available to borrowers. Call us at (650) 689-5684 and we'll work with you to qualify you for the best loan program for your needs. There are some general questions to ask yourself as you look at the options.

Reducing Your Monthly Payments

Are you refinancing primarily to lower your rate and monthly payments? In that case, getting a low, fixed-rate loan might be a wise option for you. Perhaps you are presently in a mortgage loan with a high, fixed interest rate, or a mortgage loan in which the rate of interest varies : an adjustable rate mortgage (ARM). Even when rates come up later, unlike with your ARM, when you get a fixed-rate mortgage, you lock in the low rate for the life of your mortgage. A fixed-rate mortgage is especially a wise option if you don't think you'll be selling your home within the next five years or so. On the other hand, if you can see yourself moving before too long, an adjustable rate mortgage with a low initial rate may be the best way to reduce your monthly payment.

Getting Out some Cash

Are you refinancing mainly to pull out some home equity for an infusion of cash? Perhaps you're dreaming of a cruise; you have to pay tuition for your college-bound child; or you plan to renovate your home. In this case, you will want to find a loan above the balance remaining of your present mortgage loan.With this goal, you will You will be looking for a loan for a higher amount than the balance remaining with your current mortgage in that case. However, if your interest rate is currently high and you've held it for quite a few years, you may be able to accomplish your goals without an increase in your mortgage payment.

Consolidating Your Debt

Do you have other debt, perhaps with high interest, that you need to consolidate? If you have the home equity to make it work, paying off other debt with higher interest than the rate on your mortgage (such as car loans, credit cards, student loans, or home equity loans) means you may be able to save hundreds of dollars per month.

Building up Equity More Quickly

Do you want to build up home equity more quickly, and have your mortgage paid off faster? In that case, you want to find out about refinancing to a short term mortgage - for example, a fifteen-year loan. You will be paying less interest and increasing your equity faster, even though your payments will usually be higher than they were. On the other hand, if your existing longer term loan has a low remaining balance, and was closed a while ago, you may be able to make the change without paying more each month. To help you figure out your options and the multiple benefits of refinancing, please contact us at (650) 689-5684. We would love to help you reach your goals!

Want to know more about refinancing? Call us at (650) 689-5684.

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