Refinancing: Which Option is for You?

Although it may seem like it at times, there aren't as many loan programs as there are applicants! We can help you select the refinance program that can fit your financial situation the best. Call us at (650) 689-5684 to begin the process. There are some general things to keep in mind as you look at your options.

Reducing Your Monthly Payments

Are your refinance goals to lower your rate and consequently your mortgage payments? If so, the best option might be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you may want to refinance. Even if rates come up later, unlike with your ARM, when you close a mortgage with a fixed rate, you lock in that low rate for the life of your mortgage. A fixed-rate mortgage can be especially a wise option if you aren't planning a move within the next five years or so. On the other hand, if you do see yourself selling your home in the near future, an adjustable rate mortgage with a low initial rate may be the ideal way to reduce your monthly payments.

Cashing Out

Are you refinancing mainly to "cash out" some home equity? Your home needs updating; your daughter has gone to University and needs tuition; or you have a special family vacation planned. Then you'll need to find a loan above the balance remaining of your present mortgage loan.With this goal, you'll You will be looking for a loan for a bigger amount than the remaining balance with your current home loan in that case. You may not have an increase in your mortgage payemnt, though, if you've had your existing loan for a while, and/or your loan interest rate is high.

Debt Consolidation

Perhaps you'd like to cash out a portion of the home equity (cash out) to use toward other debt. If you have enough equity, paying toward other debt with rates higher than your mortgage (credit cards or home equity loans, for example) may help save you a chunk of money each month.

Building up Equity Faster

Are you hoping to fatten up your equity faster, and pay off your mortgage loan more quickly? Then, you need to look into refinancing to a short term mortgage loan - like a fifteen-year mortgage program. You will be paying less interest and growing your equity faster, although your monthly payments will usually be more than they were. However, if you have had your existing thirty-year loan for a long time and the remaining balance is relatively low, you could be able to do this without increasing your monthly payment — it's even possible to save! To help you understand your options and the multiple benefits in refinancing, please call us at (650) 689-5684. We are here for you.

Want to know more about refinancing? Give us a call: (650) 689-5684.

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