Refinancing: Which Loan Program is for You?
Even though it may seem like it sometimes, there are not as many loan options as there are applicants! Contact us at (512) 335-7800 and we will match you with the loan program that best fits you. What are your goals for your refinance loan? Considering 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? Then a low, fixed rate loan may be your best option. Perhaps you are now in a mortgage loan with a high, fixed interest rate, or a loan with which the rate of interest varies - an adjustable rate mortgage (ARM). Even when rates get higher later, unlike with your ARM, when you qualify for a mortgage with a fixed rate, you lock in the low interest rate for the term of your loan. If you are planning to stay in your home for about five more years, a fixed-rate loan may be an especially good fit for you. However, an ARM with a initial low payment could be a smarter way to reduce your mortgage payments if you see yourself moving in the next few years.
Is your refinance goal primarily to pull out some home equity for an infusion of cash? Maybe you're going on a much needed vacation; you need to pay tuition for your college-bound child; or you are planning some home improvements. So you'll want to qualify for a loan for more than the balance remaining on your current mortgage.With this goal, you need You might not increase your monthly payemnt, however, if you have had your current loan for a while, and/or your loan interest rate is high.
Do you want to pull out some home equity to consolidate other debt? Good plan! If you have the equity in your home for it, paying off other debt with higher interest than the rate on your mortgage (for example: credit cards, home equity loans, or car loans) means you can save possibly several hundred dollars in your budget each month.
Switching to a Shorter Term Loan
Are you hoping to fatten up your home equity faster, and pay your mortgage loan off more quickly? If this is your hope, your refinance mortgage can move you to a loan program with a short, for example: a 15 year loan. You will be paying less interest and growing your equity faster, although your mortgage payments will generally be more than they were. On the other hand, if your existing long-term mortgage has a small balance remaining, and was closed a while ago, you could be able to make the move without paying more each month. To help you figure out your options and the many benefits in refinancing, please call us at (512) 335-7800. We would love to help you reach your goals!
Curious about refinancing? Give us a call at (512) 335-7800.