Refinancing: Which Program is for You?
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The huge number of refinance options available to borrowers is truly breathtaking. Contact us at 415-731-3100 and we can work with you to qualify you for the perfect refinance loan to fit your needs. What are your reasons for refinancing? Keeping in mind the following will help you begin your decision process.
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 currently have a fixed-rate mortgage with a higher rate, or maybe you hold an ARM — adjustable rate mortgage — in which the rate of interest varies. Even when rates get higher later, unlike with your ARM, when you qualify for a fixed-rate mortgage, you lock in the low interest rate for the life of your loan. This is particularly a wise option if you don't think you'll be selling your home within the next 5 years or so. However, an ARM with a low initial payment may be a smarter way to lower your mortgage payments if you plan on moving in the near future.
Are you hoping to cash out some of your equity in your refinance? Your house needs renovating; your son has been accepted to college and needs tuition money; or you have a special family vacation planned. In this case, you want to apply for a loan for more than the remaining balance on your current mortgage.Then you'll need If you've had your current mortgage for quite a while and/or have a loan with high interest, you might\could be able to do this without increasing your mortgage payment.
Do you want to cash out some of your equity to consolidate additional debt? Good plan! If you have a fair amount of home equity, paying toward 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.
Paying it off Faster
Are you dreaming of paying your loan off more quickly, while building up your equity more quickly? You should consider refinancing to a short-term loan, like a 15-year mortgage. You will be paying less interest and growing your equity faster, even though your payments will likely be more than they were. But, you may be able to make the change without a higher monthly payment if your long term mortgage was closed a while ago, and the balance remaining is small. You could even pay less! To help you understand your options and the numerous benefits of refinancing, please call us at 415-731-3100. We would love to help you reach your goals!