Refinancing: Which Option is for You?
When you are overwhelmed with all the options, it may seem as if there are even more refinance programs than borrowers! Contact us at 305-967-7200 and we will help you qualify for the perfect loan program to fit your needs. There are some general questions to ask yourself while you look at your choices.
Lowering Your Payments
Is your refinance primarily to lower your rate and monthly payments? If so, your best choice may be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you might want to refinance. Different that the ARM, your low fixed rate mortgage will stay at a certain low rate for the term of your mortgage loan, even as interest rates rise. If you plan to stay in your home for about five more years, a fixed-rate loan may be a particulary good fit for you. However, an ARM with a low intitial payment could be a better way to reduce your mortgage payments if you see yourself moving in the next few years.
Refinancing to Cash Out
Is your refinance goal primarily to "cash out" some home equity? Your house needs updating; your daughter has gone to University and needs tuition; or you are taking your family on a cruise. So you will want to apply for a loan higher than the remaining balance on your existing mortgage.In this case, you'll want to need to qualify for a loan for a bigger amount than the remaining balance on your existing mortgage loan. However, if your loan interest rate is high now and you've had it for quite a few years, you may be able to reach your goals without an increase in your mortgage payment.
Do you want to pull out a portion of your home equity to consolidate additional debt? Good idea! If you have the equity in your home to make it work, taking care of other debt with higher interest than the rate on your mortgage (for example: car loans, credit cards, student loans, or home equity loans) means you can save possibly several hundred dollars in your monthly budget.
Building up Equity More Quickly
Are you dreaming of paying off your loan faster, while building up your home equity faster? In that case, you'll want to look into refinancing to a short term mortgage loan - such as a fifteen-year mortgage program. You will be paying less interest and increasing your equity faster, even though your mortgage payments will usually be higher than you have been paying. But, you might be able to switch without a higher monthly mortgage payment if your longer term mortgage loan was closed a while back, and the balance remaining is somewhat low. You could even make it lower! To help you figure out your options and the many benefits of refinancing, please call us at 305-967-7200. We are here to help you reach your goals!
Curious about refinancing your home? Give us a call: 305-967-7200.