Selecting a Refinancing Option
When you are overwhelmed with so many choices, it may seem as if there are even more refinance programs than borrowers! We can guide you to choose the loan program that can fit your needs the best. Contact us at (512) 291-6100 to begin the process. There are several things to keep in mind as you consider the choices.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? If so, getting a low, fixed-rate loan may be a good option for you. Maybe you now have a fixed-rate mortgage with a higher rate, or maybe you hold an ARM — adjustable rate mortgage — in which the rate of interest can vary. Unlike the ARM, your low fixed-rate mortgage will stay at a certain low rate for the term of your mortgage, even when interest rates rise. If you are planning to stay in your home for about five more years, a loan with a fixed rate may be an especially good choice for you. But if you do expect to move more quickly, you will need to consider an ARM with a low initial rate to get reduced payments.
Is "cashing out" your main reason for your refinance? Maybe you're dreaming of a cruise; you have to pay tuition for your college-bound child; or you are updating your kitchen. Then you will need to find a loan above the remaining balance on your current mortgage loan.So you will want to find a loan for a bigger amount than the balance remaining on your present mortgage. However, if your mortgage rate is currently high and you've had it for a long time, you may be able to reach your goals without making your mortgage payments increase.
Consolidating Your Debt
Maybe you'd like to cash out some of the equity (cash out) to put toward other debt. If you have the equity in your home for it, taking care of other debt with higher interest than the rate on your mortgage (for example: car loans, credit cards, student loans, or home equity loans) means you may be able to save several hundred dollars each month.
Switching to a Shorter Term Loan
Do you plan to build up equity quicker, and pay off your mortgage faster? Then, you'll need to find out about refinancing to a short term mortgage - such as a fifteen-year mortgage program. Your monthly payments will probably be higher than they were with the longer term mortgage loan, 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 balance remaining is low enough. You could even pay less! To help you determine your options and the numerous benefits in refinancing, please contact us at (512) 291-6100. We are here for you.
Curious about refinancing? Give us a call at (512) 291-6100.