Refinancing: Which Option is for You?
When you are overwhelmed with so many options, it may seem like there are even more refinance programs than applicants! Contact us at (203) 526-9345 and we will match you with the refinance loan program that is ideal for you. What are your reasons for refinancing? Keeping in mind the information below will help you narrow your choices.
Reducing Your Monthly Payments
Is your refinance primarily to lower your rate and monthly payments? In that case, a low, fixed rate loan may be your best option. Perhaps you are now in a mortgage with a high, fixed interest rate, or a loan with which the rate of interest varies : an adjustable rate mortgage (ARM). Unlike the ARM, your low fixed rate mortgage will stay at a certain low rate for the life of your mortgage, even as interest rates rise. If you are planning to live in your home for at least five more years, a fixed-rate loan may be an especially good fit for you. But if you do plan to move more quickly, you will need to consider an ARM with a low initial rate in order to achieve lower mortgage payments.
Are you wanting to cash out some of your equity in your refinance? Perhaps you want to make home improvements, pay your child's college tuition bill, or go on a dream vacation. With this in mind, you'll want to find a loan higher than the balance remaining of your present mortgage loan.With this goal, you want to qualify for a loan program for a higher amount than the balance remaining on your existing mortgage loan. However, if your loan interest rate is currently high and you've had it for a long time, you may be able to accomplish your goals without making your monthly payments higher.
Perhaps you hope to cash out some of the equity in your home (cash out) to use toward other debt. If you have a fair amount of home equity, paying off other debt with rates higher than your home loan (credit cards or home equity loans, for example) could help save you a chunk of money every month.
Switching to a Shorter Term Loan
Are you planning to fatten up your equity faster, and pay your mortgage loan off sooner? Consider refinancing with a short-term loan, such as a 15-year mortgage loan. Your monthly payments will probably be more than with a longer term loan, but in exchange, that you will pay substantially less interest and will build up equity quicker. But, you may be able to make the change without a higher monthly payment if your long term mortgage was closed a while back, and the balance remaining is small. You could even pay less! To help you determine your options and the numerous benefits of refinancing, please call us at (203) 526-9345. We are here for you.
Curious about refinancing? Give us a call: (203) 526-9345.