Refinancing: Which Program is for You?
Even though it seems like it at times, there aren't as many loan programs as there are borrowers! Call us at 803-779-3638 and we'll work with you to qualify you for the right loan program to fit your financial needs. There are some general questions to ask yourself as you consider your options.
Making Your Payments Lower
Is your refinance primarily to lower your rate and monthly payments? In that case, a low, fixed rate loan may be the best option for you. Maybe you are presently in a mortgage with a high, fixed interest rate, or a mortgage with which the interest rate varies : an adjustable rate mortgage (ARM). Even when rates come up later, unlike with your ARM, when you qualify for a fixed-rate mortgage, you set the low rate for the life of your loan. If you aren't planning on moving in the near future (about 5 years), a fixed-rate mortgage can especially be a great choice. However, an ARM with a initial low payment may be a better way to reduce your monthly payments if you see yourself moving within the near future.
Are you planning to cash out some of your equity with your refinance? Perhaps you want to pay for home improvements, take care of your college kid's tuition, or go on a dream vacation. In this case, you'll need to look for a loan for more than the balance remaining of your existing mortgage.Then you'll want to find a loan program for a bigger number than the balance remaining on your present mortgage. You may not increase your monthly payemnt, however, if you have had your existing loan for a number of years, and/or your loan interest rate is high.
Consolidating Your Debt
Do you want to pull out a portion of your home equity to consolidate other debt? Good plan! If you have a fair amount of home equity, taking care of other debt with higher interest that your home loan (credit cards or home equity loans, for example) might help save you a chunk of cash each month.
Getting a Shorter Term Loan
Do you want to build up home equity quicker, and pay off your mortgage more quickly? Then, you'll need to find out about refinancing to a short term mortgage loan - like a fifteen-year mortgage loan. The payments will likely be higher than they were with a long-term loan, but in exchange, you will pay quite a bit less interest and will build up equity more quickly. But, you could be able to make the change without a bigger monthly mortgage payment if your longer term mortgage was closed a while back, and the remaining balance is small. You could even make it lower! To help you determine your options and the multiple benefits in refinancing, please call us at 803-779-3638. We are here to help you reach your goals!