Refinancing: Which Option is for You?

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There are not as many loan program choices as there are applicants, but sometimes it feels like it! We can guide you to locate the loan program that can fit your situation the best. Contact us at 916-731-4405 to begin the process. There are some general questions to ask yourself while you look at your options.

Lowering Your Payments

Is your refinance primarily to lower your rate and monthly payments? In that case, a low, fixed rate loan may be the right option for you. Maybe you currently have a fixed-rate mortgage with a higher rate, or perhaps you have an ARM — adjustable rate mortgage — where the rate of interest can vary. Even if rates rise later, unlike with your ARM, when you qualify for a fixed-rate mortgage, you lock in that low rate for the term of your loan. If you are planning to live in your home for about five more years, a fixed-rate loan may be an especially good option for you. However, an ARM with a initial low payment could be a better way to lower your mortgage payments if you expect to move in the next few years.

Refinancing to Cash Out

Is "cashing out" your main purpose for your refinance? Your house needs new carpet; your daughter has gone to college and needs tuition; or you are taking your family on a cruise. So you will want to qualify for a loan higher than the remaining balance on your current mortgage loan.With this goal, you will want to find a loan program for a bigger amount than the remaining balance on your existing mortgage loan. However, if your loan interest rate is currently high and you've had it for a long time, you could be able to accomplish your goals without a rise in your mortgage payment.

Consolidating Debt

Maybe you want to cash out some of the home equity (cash out) to use toward other debt. If you own any higher interest debts (like credit cards or vehicle loans), you may be able to pay that debt off with a lower rate loan through your refinance, if you have the right amount of home equity.

Paying it off Faster

Do you plan to build up equity quicker, and pay off your mortgage more quickly? Then, you'll want to find out about refinancing to a short term mortgage - such as a fifteen-year mortgage program. You will be paying less interest and growing your home equity more quickly, even though your monthly payments will generally be more than you have been paying. However, if you've held your current thirty-year mortgage loan for a number of years and the loan balance is rather low, you could be able to do this without raising your monthly payment — you may even be able to save! To help you figure out your options and the numerous benefits of refinancing, please call us at 916-731-4405. We are here for you.

Curious about refinancing? Give us a call at 916-731-4405.

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