Refinancing: Which Loan Program is for You?
Even though it may seem like it sometimes, there are not as many loan options as there are applicants! Contact us at 952 417 8481 and we can match you with the loan program that best fits you. In the interest of looking at your choices, 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? If so, your best choice could be a low fixed-rate loan. Perhaps you now hold a fixed-rate mortgage with a higher rate, or perhaps you have an ARM — adjustable rate mortgage — with which the interest rate can vary. Even if rates come up later, unlike with your ARM, when you qualify for a fixed-rate mortgage, you set the low interest rate for the term of your loan. If you plan to stay in your home for at least five more years, a fixed-rate loan may be an especially good fit for you. However, if you do see yourself moving within several years, an ARM with a small initial rate might be the best way to lower your monthly payment.
Getting Out some Cash
Is your refinance goal primarily to "cash out" some home equity? Maybe you're dreaming of a cruise; you have to pay tuition for your college-bound child; or you are updating your kitchen. So you'll want to get a loan higher than the balance remaining on your present mortgage loan.With this goal, you'll need If you've had your current mortgage loan for quite a while and/or have a loan with high interest, you may be able to do this without increasing your monthly payment.
Perhaps you hope to pull out a portion of the home equity (cash out) to put toward other debt. If you have some higher interest debts (such as credit cards or vehicle loans), you might 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
Are you dreaming of paying off your loan faster, while beefing up your home equity more quickly? In that case, you need to look into refinancing to a short term mortgage loan - for example, a fifteen-year mortgage program. You will be paying less interest and growing your equity more quickly, even though your payments will generally be bigger than they were. On the other hand, if your existing longer term mortgage has a low remaining balance, 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 numerous benefits in refinancing, please call us at 952 417 8481. We are here for you.
Want to know more about refinancing? Call us at 952 417 8481.