Which Refinancing Loan Program is Right for You?
There are a huge number of refinancing programs available to borrowers. Call us at 630-717-3600 and we can help you qualify for the perfect refinance program to fit your situation. In order to review your choices, you need to determine what you want to achieve with your refinance.
Making Your Payments Lower
Is your refinance primarily to lower your rate and monthly payments? If so, your best choice may be a low fixed-rate loan. Perhaps you are currently in a mortgage loan with a high, fixed interest rate, or a loan with which the interest rate varies : an adjustable rate mortgage (ARM). Even if rates get higher later, unlike with your ARM, when you qualify for a fixed rate mortgage, you lock in that low rate for the life of your mortgage. This can be particularly a wise choice if you don't think you'll be moving within the next 5 years or so. However, an ARM with a low intitial payment may be a smarter way to reduce your mortgage payments if you expect to move in the next few years.
Refinancing to Cash Out
Are you refinancing primarily to pull out some of your home equity for an infusion of cash? It could be you're dreaming of a cruise; you need to pay college tuition for your child; or you are planning some home improvements. Then you'll need to apply for a loan higher than the remaining balance of your current mortgage.Then you'll want to find a loan for a higher amount than the balance remaining on your existing mortgage loan. You might not increase your mortgage payemnt, however, if you've had your current mortgage loan for a number of years, and/or your loan interest rate is high.
Consolidating Your Debt
Perhaps you'd like to cash out some of the home equity (cash out) to use toward other debt. If you own some debt with higher interest (such as credit cards or car loans), you may be able to pay that debt off with a lower rate loan with your refinance, if you have enough home equity.
Getting a Shorter Term Loan
Are you planning to fatten your home equity faster, and pay off your mortgage loan more quickly? You should consider refinancing with a short-term loan, like a 15-year mortgage. Even though your monthly payment amount will likely be increased, you will save on interest; so your equity will build up faster. On the other hand, if your existing longer term loan has a small remaining balance, and was closed a while ago, you could be able to make the move without paying more each month. To help you understand your options and the multiple benefits of refinancing, please contact us at 630-717-3600. We are here for you.
Want to know more about refinancing? Call us: 630-717-3600.