Refinancing: Which Loan Program is for You?
The number of refinance options available to borrowers can be overwhelming. Call us at (334) 285-8850 and we can match you with the refinance program that fits you best. What do you hope to achieve with refinancing? Keeping in mind the following will help you begin your decision process.
Reducing Your Monthly Payments
Are achieving better monthly payments and an improved rate your main reasons for refinancing? If so, your best option could be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loan programs that you may want to refinance. Even when rates get higher later, unlike with your ARM, when you get a mortgage with a fixed rate, you set that low rate for the life of your loan. This kind of loan is especially a good choice if you don't think you will sell your home within the next 5 years or so. However, an ARM with a low intitial payment may be a smarter way to lower your mortgage payments if you expect to move in the near future.
Refinancing to Cash Out
Is "cashing out" your primary reason for refinancing? Maybe you need to make home improvements, pay your child's college tuition bill, or go on a special family vacation. With this in mind, you'll want to qualify for a loan above the balance remaining on your existing mortgage.So you want to find a loan program for a higher number than the remaining balance on your existing mortgage loan. You might not increase your mortgage payemnt, however, if you've had your current loan for a long time, and/or your interest rate is high.
Do you want to pull out some of your equity to consolidate other debt? Excellent idea! If you have any higher interest debts (such as credit cards or car loans), you may be able to take care of that debt with a lower rate loan with your refinance, if you have enough equity.
Building up Equity More Quickly
Are you hoping to fatten up your equity faster, and get your mortgage paid off more quickly? You should consider refinancing with a shorterterm loan, like a 15-year mortgage loan. Your payments will probably be higher than with the long-term mortgage, but in exchange, you will pay substantially less interest and can build up equity more quickly. But, you may be able to make the change without much increase in your monthly payment if your longer term mortgage was closed a while ago, and the remaining balance is somewhat low. You may even make it lower! To help you figure out your options and the many benefits in refinancing, please call us at (334) 285-8850. We can help you reach your goals!
Want to know more about refinancing? Call us at (334) 285-8850.