Refinancing: Which Option is for You?
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There are an enormous number of refinancing programs available to borrowers. Call us at 757-873-1287 and we'll help you qualify for the best loan program for your needs. There are several questions to ask yourself while you review the choices.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? Then a low, fixed rate loan may be the right option for you. Maybe you are now in a mortgage loan with a high, fixed interest rate, or a loan in which the rate of interest varies - an adjustable rate mortgage (ARM). Even if interest rates rise, a fixed-rate mortgage will stay at the same, low interest rate, unlike an ARM. This is particularly a good choice if you don't think you will move within the next five years or so. However, an ARM with a initial low payment may be a wiser way to reduce your monthly payments if you plan on moving within the near future.
Refinancing to Cash Out
Is your refinance goal mainly to pull out some home equity for an infusion of cash? Perhaps you're dreaming of a cruise; you have to pay college tuition for your child; or you plan to renovate your home. In this case, you need to get a loan higher than the balance remaining of your existing mortgage loan.Then you You'll be looking for a loan for a higher amount than the current balance with your existing mortgage in this case. However, if your interest rate is high now and you've had it for a long time, you may be able to achieve your goals without a rise in your mortgage payment.
Consolidating Your Debt
Do you hold other debt, perhaps with higher interest, that you want to consolidate? If you have the equity in your home for it, taking care of other high interest debt (for example: car loans, credit cards, student loans, or home equity loans) means you can save possibly several hundred dollars a month.
Getting a Shorter Term Loan
Do you hope to build up equity more quickly, and have your mortgage paid off faster? Then, you want to look into refinancing to a short term mortgage - for example, a fifteen-year mortgage program. Although your mortgage payment amount will usually be increased, you will be paying less interest; so your equity will build up faster. Conversely, if your existing longer term mortgage has a low balance remaining, and was closed a while ago, you could be able to make the change without paying more each month. To help you understand your options and the many benefits of refinancing, please call us at 757-873-1287. We will help you reach your goals!