Refinancing: Which Loan Program is for You?
Even though it may seem like it sometimes, there are not as many loan programs as there are borrowers! Call us at 205-941-1484 and we will work with you to qualify you for the perfect refinance loan program to fit your financial situation. There are some general questions to ask yourself as you look at your choices.
Reducing Your Monthly Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? If so, your best option may be a low fixed-rate loan. Maybe you now hold a higher rate fixed rate mortgage, or maybe you have an ARM — adjustable rate mortgage — where the rate of interest varies. Even when rates come up later, unlike with your ARM, when you get a fixed rate mortgage, you lock in that low rate for the life of your loan. If you are planning to stay in your home for about five more years, a fixed rate loan may be a particulary good option for you. But if you do plan to move more quickly, you should consider an ARM with a low initial rate to get lower payments.
Getting Out some Cash
Are you refinancing primarily to pull out some equity for an infusion of cash? Your house needs improvements; your son has been accepted to University and needs tuition money; or you have a special family vacation planned. In this case, you will need to find a loan for more than the balance remaining on your present mortgage.In this case, you will need However, if your interest rate is currently high and you've had it for a long time, you could be able to accomplish your goals without making your monthly payments bigger.
Consolidating Your Debt
Do you want to cash out some of your home equity to consolidate additional debt? Good plan! If you have enough home equity, taking care of other debt with higher interest that your home loan (credit cards or home equity loans, for example) could help save you a chunk of cash every month.
Building up Equity More Quickly
Do you want to build up home equity more quickly, and pay off your mortgage sooner? If this is your goal, your refinance can move you to a loan program with a shorter term, for example: a 15 year loan. The payments will likely be higher than with the long-term mortgage, but the pay-off is: you will pay considerably less interest and can build up equity quicker. But, you may be able to switch without a higher monthly payment if your long term mortgage loan was closed a while back, and the balance remaining is low. You may even pay less! To help you determine your options and the multiple benefits in refinancing, please contact us at 205-941-1484. We can help you reach your goals!
Curious about refinancing your home? Call us at 205-941-1484.