Refinancing: Which Option is for You?
Even though it may seem like it sometimes, there are not as many refinance loan options as there are borrowers! Call us at 410-451-2755 and we'll work with you to qualify you for the right refinance loan for your needs. There are some general questions to ask yourself as you review your choices.
Lowering Your Payments
Are getting reduced payments and a lower rate your main refinance goals? Then a good choice might be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you may want to refinance. Different that the ARM, your low fixed rate mortgage stays at a certain low rate for the term of the loan, even when interest rates rise. If you aren't planning on moving in the near future (about five years), a fixed-rate mortgage can particularly be a good choice. However, an ARM with a low intitial payment may be a better way to reduce your monthly payments if you expect to move in the next few years.
Refinancing to Cash Out
Are you planning to cash out some of your equity with your refinance? Perhaps you want to make home improvements, take care of your college kid's tuition, or take your dream vacation. With this in mind, you want to find a loan above the remaining balance of your current mortgage loan.Then you will want to qualify for a loan program for a higher amount than the remaining balance on your current mortgage. However, if your interest rate is currently high and you've held it for quite a few years, you may be able to accomplish your goals without an increase in your mortgage payment.
Do you have other debt, perhaps with high interest, that you need to consolidate? If you have some debt with high interest (such as credit cards or vehicle loans), you might be able to take care of that debt with a loan with a lower rate through your refinance, if you have the right amount of equity.
Paying it off Faster
Do you want to build up equity quicker, and pay off your mortgage more quickly? Consider refinancing to a short-term loan, such as a 15-year mortgage. Although your monthly payments will probably be increased, you will be paying less interest; so your home equity will rise up faster. But, you may be able to switch without much increase in your monthly payment if your longer term loan was closed a while ago, and the remaining balance is somewhat low. You may even make it lower! To help you figure out your options and the numerous benefits in refinancing, please contact us at 410-451-2755. We are here for you.
Curious about refinancing? Call us at 410-451-2755.