Refinancing: Which Loan Program is for You?
Although it may seem like it at times, there are not as many loan programs as there are borrowers! Call us at 978-422-2311 and we can help you qualify for the perfect refinance loan to fit your financial situation. What do you hope to achieve with refinancing? Keeping in mind the information below will help you begin your decision process.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? In that case, a low, fixed rate loan may be the best loan program for you. Maybe you now have a fixed-rate mortgage with a higher rate, or perhaps you have an ARM — adjustable rate mortgage — where the interest rate varies. Even when rates rise later, unlike with your ARM, when you get a mortgage with a fixed rate, you lock in that low rate for the life of your mortgage. If you are not expecting to sell your home in the near future (about five years), a fixed-rate mortgage can especially be a wise loan option. However, if you can see yourself moving in the near future, an adjustable rate mortgage with a low initial rate could be the best way to lower your monthly payment.
Getting Out some Cash
Is your refinance goal mainly to pull out some of your home equity for an infusion of cash? Perhaps you need to pay for home improvements, pay your child's college tuition bill, or go on a special family vacation. Then you want to find a loan above the balance remaining on your current mortgage loan.Then you You will want to qualify for a loan for a higher amount than the current balance on your present mortgage in that case. You may not increase your mortgage payemnt, however, if you've had your current loan for a while, and/or your loan interest rate is high.
Do you hold other debt, maybe with a high interest rate, that you need to consolidate? If you have the home equity to make it work, taking care of other high interest debt (such as home equity loans, student loans, or credit cards) means you may be able to save hundreds of dollars each month.
Building up Equity More Quickly
Are you dreaming of paying off your loan more quickly, while building up your home equity more quickly? In that case, you'll need to find out about refinancing to a short term mortgage loan - such as a fifteen-year mortgage program. Even though your mortgage payment amount will probably be increased, you can save on interest; so your home equity will build up faster. However, if you have had your existing thirty year mortgage for a long time and the remaining balance is rather low, you could be able to do this without raising your mortgage payment — you could even be able to save! To help you understand your options and the numerous benefits in refinancing, please call us at 978-422-2311. We can help you reach your goals!
Curious about refinancing? Call us: 978-422-2311.