Which Refinancing Loan Program is Right for You?
Although it may seem like it sometimes, there aren't as many loan programs as there are applicants! We can help you choose the refinance program that can fit your financial situation the best. Contact us at (281) 778-0805 to get things started. In order to review your choices, you should think about what you want to achieve with your refinance.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? Then your best option might be a low fixed-rate loan. Perhaps you currently have a fixed-rate mortgage with a higher rate, or perhaps you have an ARM — adjustable rate mortgage — in which the rate of interest varies. Even if rates come up later, unlike with your ARM, when you close a fixed rate mortgage, you set that low rate for the term of your mortgage. A fixed-rate mortgage is especially a wise choice if you aren't expecting a move within the next five years or so. However, if you do see yourself moving within several years, an ARM with a small initial rate could be the ideal way to reduce your monthly payment.
Are you hoping to cash out some of your home equity in your refinance? Your home needs improvements; your daughter has been accepted to college and needs tuition money; or you have a special family vacation planned. In this case, you will need to apply for a loan above the balance remaining on your current mortgage.With this goal, you want to qualify for a loan program for a higher number than the balance remaining on your present mortgage loan. However, if your interest rate is currently high and you have held it for quite a few years, you may be able to reach your goals without making your mortgage payments increase.
Do you want to cash out some home equity to consolidate other debt? Great plan! If you have a fair amount of equity, paying toward other debt with higher interest that your mortgage loan (credit cards or home equity loans, for example) may be able to save you a lot of cash every month.
Switching to a Shorter Term Loan
Do you want to build up equity more quickly, and have your mortgage paid off sooner? If this is your goal, the refinance loan can move you to a mortgage program with a shorter term, such as a 15 year loan. The mortgage payments will likely be more than they were with a longer term mortgage, but the pay-off is: you will pay substantially less interest and will build up equity more quickly. But, you could be able to make the change without a higher monthly payment if your longer term mortgage loan was closed a while ago, and the remaining balance is small. You may even make it lower! To help you determine your options and the multiple benefits of refinancing, please contact us at (281) 778-0805. We will help you reach your goals!
Want to know more about refinancing? Call us at (281) 778-0805.