Which Refinancing Loan Program is Right for You?
Even though it may seem like it sometimes, there aren't as many loan options as there are borrowers! Call us at (610) 889-7467 and we can match you with the refinance program that best fits you. There are some general questions to ask yourself while you review your choices.
Reducing Your Monthly Payments
Are getting better mortgage payments and an improved rate your main reasons for refinancing? In that case, your best choice could be a low fixed-rate loan. Maybe you now hold a higher rate fixed rate mortgage, or maybe you hold an ARM — adjustable rate mortgage — in which the rate of interest can vary. Different that the ARM, your low fixed-rate mortgage will stay at a certain low rate for the life of your mortgage loan, even when interest rates rise. If you are not expecting to move in the near future (about 5 years), a fixed-rate mortgage can particularly be a good option. However, an ARM with a low intitial payment may be a wiser way to reduce your monthly payments if you expect to move within the near future.
Getting Out some Cash
Are you planning to cash out some of your equity in your refinance? Maybe you're going on a much needed vacation; you need to pay college tuition for your child; or you are planning some home improvements. So you'll need to apply for a loan higher than the remaining balance on your current mortgage.So you will You will be looking for a loan for a bigger amount than the balance remaining of your present mortgage in that case. However, if your loan interest rate is high now and you've had it for a long time, you may be able to reach your goals without making your mortgage payments rise.
Consolidating Your Debt
Perhaps you want to pull out a portion of the equity (cash out) to use toward other debt. If you have a fair amount of home equity, paying toward other debt with higher interest rates that your home loan (credit cards or home equity loans, for example) could help save you a chunk of cash each month.
Paying it off Faster
Are you hoping to fatten up your equity faster, and pay off your mortgage sooner? You should consider refinancing to a shorterterm loan, often a 15-year mortgage. The mortgage payments will likely be more than with the long-term loan, but the pay-off is: that you will pay substantially less interest and can build up equity more quickly. However, if you've had your current thirty year loan for a number of years and the loan balance is rather low, you might be do this without raising your monthly payment — you may even be able to save! To help you understand your options and the multiple benefits of refinancing, please contact us at (610) 889-7467. We are here to help you reach your goals!
Want to know more about refinancing your home? Give us a call: (610) 889-7467.