Refinancing: Which Option is for You?
Although it may seem like it sometimes, there are not as many refinance loan choices as there are applicants! We can help you select the loan program that will fit your financial situation the best. Contact us at 952 417 8481 to get things started. What are your goals for refinancing? Considering in mind the information below will help you narrow your choices.
Reducing Your Monthly Payments
Are you refinancing primarily to lower your rate and monthly payments? Then a low, fixed rate loan may be your best option. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loan programs that you might want to refinance. Even if rates come up later, unlike with your ARM, when you get a fixed-rate mortgage, you set that low interest rate for the life of your loan. If you are expecting to stay in your home for about five more years, a fixed rate mortgage may be a particulary good fit for you. However, an ARM with a initial low payment could be a better way to reduce your payments if you see yourself moving in the next few years.
Refinancing to Cash Out
Are you hoping to cash out some of your home equity with your refinance? Your home needs improvements; your son has gone to University and needs tuition money; or you are planning a special vacation. So you will want to get a loan above the balance remaining on your existing mortgage.With this goal, you will want to need to qualify for a loan program for a bigger amount than the remaining balance on your current mortgage. However, if your loan interest rate is high now and you've held it for quite a few years, you may be able to achieve your goals without making your monthly payments rise.
Do you hold other debt, maybe with higher interest, that you'd like to consolidate? If you have some debt with high interest (like credit cards or car loans), you may be able to take care of that debt with a loan with a lower rate with your refinance, if you have the right amount of home equity.
Switching to a Shorter Term Loan
Are you planning to fatten up your home equity faster, and pay your mortgage off more quickly? If this is your hope, your refinance mortgage can change you to a mortgage program with a shorter term, such as a 15 year loan. Although your monthly payments will likely be increased, you will be paying less interest; so your equity will rise up faster. Conversely, if your existing long-term loan has a small balance remaining, and was closed a while ago, you may be able to make the move without paying more each month. To help you understand your options and the many benefits of refinancing, please call us at 952 417 8481. We are here for you.
Want to know more about refinancing your home? Call us: 952 417 8481.