Which Refinancing Option is Best for You?
When you are overwhelmed with all the options, it may seem as if there are even more refinance loan programs than applicants! Contact us at 972.798.2110 and we can match you with the refinance loan program that is best for your needs. In order to review your choices, you can determine your goals for your refinance.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? Then your best option may be a low fixed-rate loan. Perhaps you are now in a mortgage with a high, fixed interest rate, or a mortgage loan in which the rate of interest varies - an adjustable rate mortgage (ARM). Even if rates rise later, unlike with your ARM, when you close a fixed-rate mortgage, you set that low interest rate for the term of your mortgage. If you are not planning a move in the near future (about five years), a fixed rate mortgage loan can particularly be a great choice. But if you do plan to move more quickly, you should consider an ARM with a low initial rate in order to achieve lower payments.
Are you planning to cash out some of your home equity in your refinance? Maybe you're going on a much needed vacation; you need to pay tuition for your college-bound child; or you plan to renovate your home. In this case, you need to look for a loan higher than the remaining balance of your existing mortgage.In that case, you'll You'll need to apply for a loan for a higher amount than the current balance on your existing mortgage in that case. If you've had your current mortgage for a long time and/or have a mortgage loan with high interest, you may be able to do this without making your mortgage payment bigger.
Consolidating Your Debt
Do you hold other debt, maybe with high interest, that you'd like to consolidate? If you have the home equity for it, paying off other debt with higher interest than the rate on your mortgage (like car loans, credit cards, student loans, or home equity loans) means you can save possibly several hundred dollars monthly.
Getting a Shorter Term Loan
Are you planning to fatten your home equity faster, and pay off your mortgage loan sooner? If this is your goal, the refinance loan can switch you to a loan program with a shorter term, like a 15 year loan. Your monthly payments will probably be more than they were with your long-term mortgage, but the pay-off is: you will pay considerably less interest and can build up equity quicker. Conversely, if your current longer term loan has a low balance remaining, and was closed a while ago, you may be able to make the move without paying more each month. To help you understand your options and the multiple benefits in refinancing, please contact us at 972.798.2110. We would love to help you reach your goals!
Curious about refinancing your home? Give us a call: 972.798.2110.