Refinancing: Which Option is for You?
Even though it may seem like it sometimes, there are not as many refinance choices as there are borrowers! Call us at (773) 774-9040 Ext 121 and we can match you with the loan program that best fits you. There are several things to bear in mind while you consider the options.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? In that case, a low, fixed rate loan may be your best option. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you might want to refinance. Even when interest rates rise, a fixed-rate mortgage loan must stay at the same, low interest rate, unlike an ARM. A fixed-rate mortgage is particularly a wise idea if you don't think you'll be moving within the next 5 years or so. However, an ARM with a low intitial payment may be a smarter way to reduce your mortgage payments if you see yourself moving within the near future.
Is "cashing out" your primary purpose for your refinance? Maybe you're planning a special vacation; you have to pay college tuition for your child; or you plan to renovate your home. With this in mind, you'll need to get a loan for more than the remaining balance on your present mortgage loan.With this goal, you'll want However, if your mortgage rate is currently high and you've held it for a long time, you may be able to accomplish your goals without making your monthly payments increase.
Maybe you'd like to pull out a portion of the equity in your home (cash out) to use toward other debt. If you have some debt with higher interest (like credit cards or car loans), you may be able to take care of that debt with a lower rate loan through your refinance, if you have the right amount of home equity.
Getting a Shorter Term Loan
Do you hope to build up home equity quicker, and pay off your mortgage faster? If this is your wish, the refinance can switch you to a mortgage loan program with a shorter term, such as a 15 year loan. Even though your monthly payment amount will probably be increased, you will be paying less interest; so your home equity will rise up faster. But, you might be able to switch without a higher monthly payment if your longer term mortgage was closed a while back, and the remaining balance is small. You could even make it lower! To help you understand your options and the many benefits of refinancing, please contact us at (773) 774-9040 Ext 121. We are here for you.
Want to know more about refinancing your home? Call us at (773) 774-9040 Ext 121.