Refinancing: Which Loan Program is for You?
Although it may seem like it sometimes, there are not as many refinance options as there are borrowers! Call us at 952 417 8481 and we can help you qualify for the best refinance loan for your situation. There are several things to keep in mind while you review the options.
Lowering Your Payments
Are you refinancing primarily to lower your rate and monthly payments? In that case, getting a low, fixed-rate loan might be a wise choice for you. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loans that you may want to refinance. Even as interest rates rise, a fixed rate mortgage will stay at the same, low interest rate, unlike an ARM. If you are not expecting to sell your home in the near future (about five years), a fixed rate mortgage loan can especially be a great option. However, an ARM with a low intitial payment could be a better way to lower your payments if you plan on moving in the next few years.
Refinancing to Cash Out
Is "cashing out" your primary purpose for refinancing? Perhaps you're planning a special vacation; you have to pay college tuition for your child; or you are updating your kitchen. So you want to qualify for a loan above the balance remaining of your present mortgage loan.Then you'll want You might not have an increase in your monthly payemnt, though, if you've had your current mortgage for a while, and/or your loan interest rate is high.
Do you have other debt, maybe with high interest, that you want to consolidate? If you hold some higher interest debts (like credit cards or vehicle loans), you might be able to take care of that debt with a lower rate loan with your refinance, if you have the equity built up to make it work.
Building up Equity Faster
Do you hope to build up equity more quickly, and have your mortgage paid off faster? You should consider refinancing to a short-term loan, such as a 15-year mortgage. The payments will likely be higher than with a long-term loan, but the pay-off is: you will pay considerably less interest and will build up equity more quickly. However, if you have had your existing 30-year mortgage for a number of years and the remaining balance is rather low, you might be do this without raising your monthly payment — it's even possible to save! To help you understand your options and the multiple benefits of refinancing, please contact us at 952 417 8481. We will help you reach your goals!
Want to know more about refinancing? Give us a call at 952 417 8481.