Which Refinancing Option is Right for You?

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There are not as many refinance loan programs as there are borrowers, but at times it feels like it! Contact us at 415.931.2883 and we can work with you to qualify you for the right refinance loan program for your situation. There are some general questions to ask yourself as you review the options.

Reducing Your Monthly Payments

Is your refinance primarily to lower your rate and monthly payments? In that case, getting a low, fixed-rate loan may be a good choice for you. Maybe you now have a fixed-rate mortgage with a higher rate, or maybe you have an ARM — adjustable rate mortgage — where the rate of interest can vary. Even when interest rates rise, a fixed-rate mortgage will remain at the same, low interest rate, unlike an ARM. A fixed-rate mortgage is especially a wise idea if you don't expect to sell your home within the next 5 years or so. 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 reduced payments.

Getting Out some Cash

Is your refinance goal mainly 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 plan to renovate your home. So you need to get a loan higher than the remaining balance of your existing mortgage loan.With this goal, you will You'll be looking for a loan for a higher amount than the balance remaining of your present mortgage loan in this case. However, if your loan interest rate is currently high and you have held it for a long time, you may be able to reach your goals without a rise in your mortgage payment.

Consolidating Debt

Perhaps you hope to pull out some of the equity in your home (cash out) to put toward other debt. If you have enough home equity, taking care of other debt with rates higher than your mortgage (credit cards or home equity loans, for example) could be able to save you a lot of cash each month.

Building up Equity Faster

Are you dreaming of paying your loan off faster, while building up your equity more quickly? In that case, you want to look into refinancing to a short term mortgage loan - like a fifteen-year mortgage loan. Even though your mortgage payment amount will usually be more, you can be paying less interest; so your equity will rise up faster. On the other hand, if your current longer term mortgage loan has a low remaining balance, and was closed a while ago, you might be able to make the switch without paying more each month. To help you understand your options and the multiple benefits of refinancing, please call us at 415.931.2883. We are here to help you reach your goals!

Want to know more about refinancing? Give us a call at 415.931.2883.