Refinancing: Which Program is for You?

The huge number of refinance options available can be overwhelming. Contact us at (661) 288-2987 and we will match you with the refinance loan program that best fits you. There are some general things to bear in mind as you look at your choices.

Reducing Your Monthly 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. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loans that you may want to refinance. Even when interest rates rise, a fixed-rate mortgage must stay at the same, low interest rate, unlike an ARM. If you are planning to stay in your home for about five more years, a fixed rate loan may be a particularly good fit for you. However, an ARM with a initial low payment could be a wiser way to lower your mortgage payments if you plan on moving in the near future.

Getting Out some Cash

Are you refinancing mainly to "cash out" some home equity? Perhaps you want to update your kitchen, take care of your college kid's tuition, or go on a an Alaskan cruise. In this case, you will need to look for a loan higher than the remaining balance of your current mortgage.In that case, you'll want to need to find a loan for a bigger amount than the balance remaining on your current mortgage loan. If you've had your existing mortgage for a long time and/or have a loan with a high interest rate, you may be able to do this without increasing your mortgage payment.

Consolidating Debt

Perhaps you want to pull out some of the home equity (cash out) to use 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 (like home equity loans, student loans, or credit cards) means you can possible save several hundred dollars per month.

Building up Equity More Quickly

Do you plan to build up equity more quickly, and pay off your mortgage faster? In that case, you want to find out about refinancing to a short term mortgage - such as a fifteen-year loan. Your payments will probably be more than they were with the longer term mortgage loan, but the pay-off is: you will pay substantially less interest and will build up equity quicker. But, you could be able to make the change without a bigger monthly mortgage payment if your long term loan was closed a while ago, and the remaining balance is somewhat low. You could even make it lower! To help you determine your options and the multiple benefits of refinancing, please contact us at (661) 288-2987. We are here for you.