Which Refinancing Program is Right for You?
When you are overwhelmed with so many choices, it may seem as if there are even more loan programs than borrowers! We can help you choose the loan program that can fit your needs the best. Contact us at 952 417 8481 to get started. In the interest of looking at your options, you can determine what you want to achieve with the refinance.
Lowering Your Payments
Is your refinance primarily to lower your rate and monthly payments? If so, your best choice may be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you might want to refinance. Different that the ARM, your low fixed-rate mortgage stays at a certain low rate for the life of your mortgage loan, even if interest rates rise. If you aren't planning a move in the near future (about five years), a fixed rate mortgage loan can especially be a great loan option. But if you do plan to sell your home more quickly, you should consider an ARM with a low initial rate in order to achieve lower payments.
Getting Out some Cash
Are you refinancing primarily to pull out some home equity for an infusion of cash? Your house needs renovating; your daughter has been accepted to University and needs tuition money; or you are planning a special vacation. With this in mind, you'll need to find a loan for more than the remaining balance of your existing mortgage.With this goal, you'll want to qualify for a loan program for a bigger number than the balance remaining on your present mortgage. However, if your loan interest rate is currently high and you've had it for quite a few years, you could be able to reach your goals without making your monthly payments rise.
Maybe you hope to pull out a portion of the equity (cash out) to use toward other debt. If you own some debt with steep interest (such as credit cards or car 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.
Switching to a Shorter Term Loan
Do you plan to build up equity more quickly, and have your mortgage paid off more quickly? You should consider refinancing with a shorterterm loan, often a 15-year mortgage loan. Even though your mortgage payments will usually be increased, you can save on interest; so your home equity will rise up faster. However, if you've had your current 30 year mortgage for a number of years and the loan balance is relatively low, you could be do this without increasing your monthly payment — you might even be able to save! To help you determine your options and the numerous benefits of refinancing, please contact us at 952 417 8481. We will help you reach your goals!
Want to know more about refinancing? Call us at 952 417 8481.