Refinancing: Which Loan Program is for Your Family?

The huge number of refinance options available can be overwhelming. We can guide you to locate the refinance loan program that will fit your financial situation the best. There are some general questions to ask yourself while you consider your options.

Making Your Payments Lower

Are you refinancing primarily to lower your rate and monthly 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 loans that you may want to refinance. Even if interest rates rise, a fixed rate mortgage loan will remain at the same, low interest rate, unlike an ARM. If you are not planning on moving in the near future (about five years), a fixed-rate mortgage can especially be a wise loan option. However, an ARM with a initial low payment may be a wiser way to reduce your mortgage payments if you see yourself moving within the near future. As a result of refinancing, your total finance charges can be higher over the life of the loan.

Getting Out Some Cash

Are you wanting to cash out some of your home equity with your refinance? Perhaps you're going on a much needed vacation; you have to pay tuition for your college-bound child; or you are planning some home improvements. With this in mind, you will want to get a loan above the remaining balance on your current mortgage loan.Then you want You might not have an increase in your mortgage payment, however, if you've had your existing mortgage for a number of years, and/or your interest rate is high.

Debt Consolidation

Do you have other debt, maybe with a high interest rate, that you'd like to consolidate? If you have the home equity to make it work, paying off other high interest debt (for example: car loans, credit cards, student loans, or home equity loans) means you may be able to save hundreds of dollars in your monthly budget.

Paying it off Sooner

Are you dreaming of paying your loan off faster, while beefing up your home equity quicker? In that case, you'll need to look into refinancing to a short term mortgage - for example, a fifteen-year mortgage loan. Your monthly payments will likely be more than they were with the long-term mortgage, but the pay-off is: you will pay substantially less interest and will build up equity more quickly. Conversely, if your existing longer term loan has a small remaining balance, and was closed a number of years ago, you might be able to make the move without paying more each month.