Refinancing: Which Option is for You?
When you are overwhelmed with so many options, it may seem as if there are even more refinance programs than borrowers! Contact us at (707) 252-2700 and we will work with you to qualify you for the best refinance program to fit your financial needs. There are some general questions to ask yourself while you review the choices.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? If so, a good option may be a low fixed-rate loan. Perhaps you are presently in a mortgage with a high, fixed interest rate, or a mortgage with which the rate of interest varies : an adjustable rate mortgage (ARM). Even when rates come up later, unlike with your ARM, when you close a fixed rate mortgage, you lock in that low rate for the term of your mortgage. This kind of loan can be especially a wise choice if you don't think you will sell your home within the next 5 years or so. However, an ARM with a low intitial payment could be a better way to reduce your monthly payments if you see yourself moving in the near future.
Is "cashing out" your main reason for refinancing? Perhaps you want to make home improvements, take care of your college kid's tuition, or take your family on a dream vacation. With this in mind, you need to get a loan above the balance remaining of your existing mortgage loan.In that case, you need You may not have an increase in your monthly payemnt, though, if you've had your current loan for a long time, and/or your interest rate is high.
Consolidating Your Debt
Do you want to cash out a portion of your home equity to consolidate additional debt? Great plan! If you have a fair amount of home equity, paying off other debt with higher interest rates that your home loan (credit cards or home equity loans, for example) may be able to save you a lot of cash each month.
Getting a Shorter Term Loan
Are you planning to fatten up your home equity faster, and pay off your mortgage loan sooner? You should consider refinancing to a short-term loan, like a 15-year mortgage. Your payments will likely be higher than with the longer term loan, but the pay-off is: you will pay quite a bit less interest and can build up equity quicker. But, you could be able to make the change without much increase in your monthly payment if your longer term mortgage loan was closed a while back, and the remaining balance is small. You could even pay less! To help you determine your options and the many benefits in refinancing, please contact us at (707) 252-2700. We are here for you.
Curious about refinancing? Give us a call at (707) 252-2700.