Which Refinancing Loan Program is Best for You?
The number of refinance options available to borrowers can be overwhelming. Contact us at 516-431-2009 and we can work with you to qualify you for the best refinance loan for your financial situation. What are your reasons for refinancing? Keeping in mind the information below will help you begin your decision process.
Lowering Your 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. Maybe you currently hold a higher rate fixed rate mortgage, or maybe you hold an ARM — adjustable rate mortgage — with which the rate of interest varies. Even when rates get higher later, unlike with your ARM, when you close a fixed-rate mortgage, you set the low interest rate for the term of your mortgage. This kind of loan can be particularly a wise option if you don't think you'll be moving within the next 5 years or so. However, if you can see yourself selling your home before too long, an adjustable rate mortgage with a low initial rate might be the best way to reduce your monthly payments.
Is "cashing out" your main reason for refinancing? Perhaps you're planning a special vacation; you have to pay tuition for your college-bound child; or you are planning some home improvements. So you'll need to look for a loan higher than the remaining balance of your present mortgage loan.With this goal, you will want to find a loan for a bigger amount than the remaining balance on your existing mortgage. You might not increase your mortgage payemnt, however, if you've had your current mortgage loan for a while, and/or your loan interest rate is high.
Consolidating Your Debt
Maybe you want to pull out some equity in your home (cash out) to put toward other debt. If you have the equity in your home to make it work, paying off other debt with higher interest than the rate on your mortgage (for example: car loans, credit cards, student loans, or home equity loans) means you may be able to save hundreds of dollars per month.
Building up Equity More Quickly
Are you planning to fatten up your home equity faster, and get your mortgage paid off sooner? In that case, you'll want to find out about refinancing to a short term mortgage loan - like a fifteen-year loan. Although your monthly payments will usually be more, you will save on interest; so your equity amount will build up faster. But, you might be able to switch without a bigger monthly mortgage payment if your longer term mortgage loan was closed a while back, and the balance remaining is low. You could even make it lower! To help you determine your options and the multiple benefits in refinancing, please contact us at 516-431-2009. We will help you reach your goals!