Choosing a Refinancing Option
Although it may seem like it sometimes, there aren't as many refinance loan options as there are borrowers! Call us at 714-970-9700 and we can match you with the refinance program that fits you best. There are some general things to have in mind as you review the options.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? Then the best choice might be a low fixed-rate loan. Maybe 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. Even when rates come up later, unlike with your ARM, when you qualify for a fixed-rate mortgage, you lock in the low interest rate for the life of your loan. If you expect to stay in your home for at least five more years, a loan with a fixed rate may be a particulary good fit for you. However, an ARM with a low intitial payment may be a wiser way to lower your monthly payments if you plan on moving in the next few years.
Are you planning to cash out some of your home equity with your refinance? Your house needs renovating; your son has been accepted to University and needs tuition money; or you are taking your family on a cruise. In this case, you want to find a loan for more than the remaining balance of your current mortgage.So you'll You'll need to get a loan for a higher amount than the current balance on your existing mortgage in that case. If you've had your existing mortgage for quite a while and/or have a mortgage with a high interest rate, you might\could be able to do this without increasing your monthly payment.
Do you hold other debt, maybe with higher interest, that you want to consolidate? If you have the home equity to make it work, paying off other debt with higher interest than the rate on your mortgage (for example: home equity loans, student loans, or credit cards) means you may be able to save hundreds of dollars per month.
Paying it off Sooner
Are you hoping to fatten your equity faster, and get your mortgage paid off more quickly? You should consider refinancing with a shorterterm loan, such as a 15-year mortgage. Your mortgage payments will likely be more than they were with a long-term loan, but the pay-off is: you will pay substantially less interest and can build up equity more quickly. But, you might be able to make the change without a bigger monthly payment if your long term mortgage was closed a while ago, and the balance remaining is small. You may even pay less! To help you understand your options and the multiple benefits of refinancing, please contact us at 714-970-9700. We are here for you.
Curious about refinancing? Call us: 714-970-9700.