Refinancing: Which Loan Program is for You?
Although it may seem like it sometimes, there aren't as many loan programs as there are applicants! Call us at (281) 778-0805 and we can match you with the refinance loan program that fits you best. What do you hope to achieve with your refinance loan? Considering in mind the following will help you narrow your choices.
Reducing Your Monthly Payments
Are you refinancing primarily to lower your rate and monthly payments? If so, applying for a low, fixed-rate loan could be a good choice for you. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loans that you may want to refinance. Even if rates get higher later, unlike with your ARM, when you get a fixed rate mortgage, you set that low rate for the term of your mortgage. This is particularly a good choice if you don't think you'll be selling your home within the next five years or so. But if you do plan to sell your home more quickly, you should consider an ARM with a low initial rate to get reduced monthly payments.
Getting Out some Cash
Is your refinance goal primarily to "cash out" some home equity? Your home needs updating; your daughter has been accepted to college and needs tuition; or you are taking your family on a cruise. Then you will want to apply for a loan above the remaining balance of your current mortgage loan.So you You'll be looking for a loan for a bigger amount than the balance remaining on your present mortgage in this case. However, if your interest rate is high now and you've held it for a long time, you may be able to achieve your goals without an increase in your mortgage payment.
Do you have other debt, perhaps with a higher interest rate, that you want to consolidate? If you hold some debt with steep interest (like credit cards or car loans), you might be able to pay that debt off with a lower rate loan with your refinance, if you have the equity built up to make it work.
Building up Equity Faster
Are you dreaming of paying off your loan more quickly, while beefing up your home equity faster? You should consider refinancing with a short-term loan, often a 15-year mortgage. Although your mortgage payment amount will probably be increased, you will be paying less interest; so your home equity will build up faster. But, you may be able to switch without much increase in your monthly mortgage payment if your long term mortgage was closed a while back, and the balance remaining is low enough. You could even pay less! To help you understand your options and the many benefits in refinancing, please contact us at (281) 778-0805. We are here for you.
Want to know more about refinancing? Call us at (281) 778-0805.