Which Refinancing Loan Program is Right for You?
Although it seems like it at times, there are not as many refinance loan choices as there are borrowers! We can guide you to select the loan program that can fit your needs the best. Contact us at 859-795-1846 to get things started. What do you hope to achieve with your refinance loan? Keeping in mind the following will help you narrow your choices.
Making Your Payments Lower
Are you refinancing primarily to lower your rate and monthly payments? If so, getting a low, fixed-rate loan may be a wise option for you. Maybe you are now in a mortgage loan with a high, fixed interest rate, or a mortgage loan in which the interest rate varies : an adjustable rate mortgage (ARM). Even as interest rates rise, a fixed-rate mortgage will stay at the same, low interest rate, unlike an ARM. A fixed-rate mortgage can be especially a good choice if you don't expect to sell your home within the next 5 years or so. However, an ARM with a low initial payment may be a wiser way to reduce your monthly payments if you expect to move in the next few years.
Are you refinancing primarily to "cash out" some home equity? It could be you need to pay for home improvements, pay your child's college tuition bill, or go on a special family vacation. With this in mind, you'll need to find a loan for more than the balance remaining on your current mortgage loan.So you'll want to find a loan for a bigger number than the remaining balance on your existing mortgage. You may not have an increase in your mortgage payment, however, if you have had your existing mortgage loan for a number of years, and/or your interest rate is high.
Do you have other debt, perhaps with a higher interest rate, that you'd like to consolidate? If you have the equity in your home for it, taking care of other high interest debt (such as home equity loans, student loans, or credit cards) means you can save possibly several hundred dollars per month.
Getting a Shorter Term Loan
Are you dreaming of paying your loan off faster, while building up your home equity faster? If this is your hope, the refinance mortgage can move you to a mortgage loan program with a short, such as a 15 year loan. You will be paying less interest and increasing your equity more quickly, although your mortgage payments will usually be more than you were paying. However, if you have had your current 30-year mortgage loan for a number of years and the loan balance is somewhat low, you might be able to do this without raising your monthly mortgage payment — it's even possible to save! To help you figure out your options and the numerous benefits in refinancing, please call us at 859-795-1846. We would love to help you reach your goals!