Refinancing: Which Loan Program is for You?
When you are overwhelmed with so many options, it may seem as if there are even more loan programs than borrowers! Call us at (207) 571-8034 and we can work with you to qualify you for the best refinance loan to fit your financial needs. What do you hope to achieve with your refinance loan? Considering in mind the following will help you narrow your choices.
Making Your Payments Lower
Is your refinance primarily to lower your rate and monthly payments? If so, the best option could be a low fixed-rate loan. Maybe you are now in a mortgage loan with a high, fixed interest rate, or a mortgage with which the interest rate varies : an adjustable rate mortgage (ARM). Unlike the ARM, your low fixed rate mortgage will stay at a certain low rate for the term of the mortgage loan, even as interest rates rise. This kind of loan is especially a wise idea if you aren't planning a move within the next 5 years or so. However, if you do see yourself moving in the near future, an ARM mortgage with a small initial rate may be the best way to lower your monthly payment.
Refinancing to Cash Out
Is your refinance goal primarily to pull out some home equity for an infusion of cash? Perhaps you're planning a special vacation; you need to pay college tuition for your child; or you plan to renovate your home. In this case, you want to find a loan above the balance remaining of your current mortgage.Then you will want to qualify for a loan program for a bigger amount than the balance remaining on your current mortgage loan. However, if your loan interest rate is currently high and you have held it for a long time, you may be able to achieve your goals without making your mortgage payments bigger.
Consolidating Your Debt
Maybe you want to pull out some of the home equity (cash out) to put toward other debt. If you have some higher interest debts (such as credit cards or car loans), you might be able to pay that debt off with a lower rate loan through your refinance, if you have the equity built up to make it work.
Switching to a Shorter Term Loan
Are you dreaming of paying off your loan sooner, while building up your home equity faster? If this is your hope, your refinance loan can change you to a mortgage program with a short, like a 15 year loan. You will be paying less interest and increasing your equity more quickly, although your mortgage payments will likely be higher than they were. But, you may be able to make the change without a higher monthly mortgage payment if your longer term loan was closed a while back, and the remaining balance is somewhat low. You may even pay less! To help you understand your options and the numerous benefits of refinancing, please call us at (207) 571-8034. We are here for you.
Want to know more about refinancing your home? Call us at (207) 571-8034.