Choosing a Refinancing Option
When you are overwhelmed with so many choices, it may seem like there are even more loan programs than applicants! Contact us at 952 417 8481 and we'll work with you to qualify you for the right refinance program for your needs. In order to review your choices, you'll need to think about your goals for the refinance.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? Then a low, fixed rate loan may be your best option. Perhaps you are currently in a mortgage loan with a high, fixed interest rate, or a mortgage loan in which the rate of interest varies - an adjustable rate mortgage (ARM). Even when interest rates rise, a fixed-rate mortgage must stay at the same, low interest rate, unlike an ARM. If you aren't expecting to move in the near future (about five years), a fixed rate mortgage loan can particularly be a wise loan option. However, an ARM with a initial low payment may be a wiser way to reduce your monthly payments if you expect to move within the near future.
Refinancing to Cash Out
Is your refinance goal primarily to "cash out" some home equity? It could be you want to update your kitchen, take care of your college kid's tuition, or take your dream vacation. With this in mind, you'll want to find a loan for more than the remaining balance on your existing mortgage.So you will need You may not have an increase in your monthly payemnt, though, if you've had your current mortgage for a long time, and/or your interest rate is high.
Do you want to pull out some of your home equity to consolidate other debt? Great plan! If you own any higher interest debts (like credit cards or car loans), you might be able to take care of that debt with a loan with a lower rate with your refinance, if you have the equity built up to make it work.
Building up Equity Faster
Do you hope to build up home equity more quickly, and pay off your mortgage more quickly? You should consider refinancing with a short-term loan, like a 15-year mortgage. The payments will likely be more than with your long-term mortgage loan, but the pay-off is: that you will pay considerably less interest and will build up equity more quickly. Conversely, if your existing long-term mortgage has a small balance remaining, and was closed a number of years ago, you could be able to make the move without paying more each month. To help you understand your options and the multiple benefits in refinancing, please contact us at 952 417 8481. We will help you reach your goals!
Want to know more about refinancing your home? Give us a call at 952 417 8481.