Refinancing: Which Program is for You?
When you are overwhelmed with all the options, it may seem like there are even more refinance loan programs than applicants! Contact us at (510) 683-9850 and we can help you qualify for the right refinance loan for your situation. There are some general questions to ask yourself as you review the options.
Reducing Your Monthly Payments
Are you refinancing primarily to lower your rate and monthly payments? In that case, a low, fixed rate loan may be the right choice for you. Maybe you now hold a higher rate fixed rate mortgage, or maybe you have an ARM — adjustable rate mortgage — in which the rate of interest can vary. Even if interest rates rise, a fixed-rate mortgage must remain at the same, low interest rate, unlike an ARM. If you expect to live in your home for at least five more years, a fixed rate loan may be a particulary good fit for you. However, if you do see yourself selling your home in the near future, an adjustable rate mortgage with a low initial rate may be the ideal way to reduce your monthly payment.
Getting Out some Cash
Is your refinance goal mainly to "cash out" some home equity? It could be you need to update your kitchen, pay your child's college tuition bill, or take your family on a dream vacation. Then you will need to look for a loan higher than the remaining balance on your existing mortgage.In that case, you will need However, if your mortgage rate is high now and you've had it for a long time, you may be able to achieve your goals without a rise in your mortgage payment.
Maybe you'd like to cash out some of the home equity (cash out) to put toward other debt. If you have built up some 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.
Getting a Shorter Term Loan
Are you hoping to fatten your equity faster, and get your mortgage paid off sooner? You should consider refinancing to a shorterterm loan, such as a 15-year mortgage. Even though your mortgage payment amount will usually be more, you will be paying less interest; so your equity amount will build up faster. But, you could be able to switch without a higher monthly payment if your longer term mortgage was closed a while ago, and the remaining balance is low enough. You may even make it lower! To help you understand your options and the multiple benefits in refinancing, please call us at (510) 683-9850. We are here for you.
Want to know more about refinancing your home? Give us a call: (510) 683-9850.
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