Which Refinancing Loan Program is Right for You?

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Even though it may seem like it sometimes, there are not as many refinance loan programs as there are applicants! Contact us at 408-823-2321 and we will match you with the refinance program that fits you best. In order to review your options, you should determine what you want to achieve with the refinance.

Making Your Payments Lower

Is your refinance primarily to lower your rate and monthly payments? In that case, the best choice might be a low fixed-rate loan. Perhaps you currently hold a fixed-rate mortgage with a higher rate, or perhaps you hold an ARM — adjustable rate mortgage — where the rate of interest can vary. Even when interest rates rise, a fixed rate mortgage will remain at the same, low interest rate, unlike an ARM. If you are expecting to stay in your home for about five more years, a fixed rate loan may be a particularly good fit for you. But if you do expect to sell your home more quickly, you should consider an ARM with a low initial rate to get lower payments. As a result of refinancing, your total finance charges may be higher over the life of the loan.

Refinancing to Cash Outon Your Equity

Is "cashing out" your primary purpose for refinancing? Your home needs updating; your son has gone to college and needs tuition money; or you are taking your family on a cruise. With this in mind, you will want to get a loan higher than the remaining balance of your current mortgage.With this goal, you'll You will need to find a loan for a bigger amount than the remaining balance with your existing home loan in that case. You may not increase your monthly payment, though, if you have had your current loan for a number of years, and/or your interest rate is high.

Consolidating Your Debt

Maybe you want to pull out some equity in your home (cash out) to put toward other debt. If you have the home equity for it, paying off other high interest debt (like credit cards, home equity loans, or car loans) means you may be able to save several hundred dollars a month.

Building up Equity More Quickly

Are you hoping to fatten your home equity faster, and get your mortgage paid off more quickly? You should consider refinancing to a shorterterm loan, such as a 15-year mortgage. Even though your mortgage payment amount will probably be increased, you will save on interest; so your equity amount will rise up faster. Conversely, if your current long-term mortgage has a small balance remaining, and was closed a while ago, you may even be able to make the move without paying more each month. To help you understand your options and the multiple benefits of refinancing, please call us at 408-823-2321. We are here for you.