Which Refinancing Option is Right for You?
Although it may seem like it sometimes, there are not as many refinance choices as there are borrowers! Contact us at 978-422-2311 and we will match you with the refinance program that best fits you. There are several questions to ask yourself as you look at your options.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? In that case, your best choice may be a low fixed-rate loan. Perhaps you currently have a higher rate fixed rate mortgage, or perhaps you hold an ARM — adjustable rate mortgage — in which the rate of interest can vary. Unlike the ARM, your low fixed rate mortgage stays at a certain low rate for the term of the loan, even as interest rates rise. If you are not expecting to sell your home in the near future (about five years), a fixed rate mortgage loan can particularly be a good loan option. However, if you do see yourself moving within the next few years, an adjustable rate mortgage with a low initial rate may be the ideal way to reduce your monthly payments.
Are you wanting to cash out some of your equity in your refinance? Maybe you're planning a special vacation; you need to pay tuition for your college-bound child; or you are updating your kitchen. Then you'll want to get a loan for more than the remaining balance on your present mortgage.With this goal, you want to need to find a loan for a higher amount than the balance remaining on your present mortgage loan. However, if your loan interest rate is currently high and you have held it for quite a few years, you may be able to accomplish your goals without a rise in your mortgage payment.
Maybe you hope to pull out some of the equity (cash out) to use toward other debt. If you hold any debt with high interest (such as credit cards or vehicle loans), you may be able to take care of that debt with a loan with a lower rate with your refinance, if you have the home equity built up to make it work.
Switching to a Shorter Term Loan
Do you hope to build up home equity quicker, and pay off your mortgage sooner? If this is your wish, the refinance mortgage can move you to a mortgage program with a shorter term, like a 15 year loan. Your payments will likely be higher than they were with the longer term mortgage loan, but the pay-off is: you will pay considerably less interest and will build up equity quicker. But, you may be able to switch without a higher monthly mortgage payment if your longer term loan was closed a while ago, and the balance remaining is small. You may even pay less! To help you understand your options and the numerous benefits of refinancing, please contact us at 978-422-2311. We are here for you.
Curious about refinancing your home? Call us at 978-422-2311.