Refinancing: Which Loan Program is for Your Family?

When you are overwhelmed with all the choices, it may seem as if there are even more refinance loan programs than borrowers! We can guide you to find the refinance program that will fit your financial situation the best. Call us at 915-274-3371 to begin the process. There are several questions to ask yourself while you look at the options.

Reducing Your Monthly Payments

Is your refinance primarily to lower your rate and monthly payments? If so, your best choice might be a low fixed-rate loan. Perhaps you are now in a mortgage loan with a high, fixed interest rate, or a mortgage in which the rate of interest varies : an adjustable rate mortgage (ARM). Even when interest rates rise, a fixed rate mortgage loan will stay at the same, low interest rate, unlike an ARM. If you are not planning on moving in the near future (about 5 years), a fixed rate mortgage loan can particularly be a good loan option. But if you do expect to sell your home more quickly, you should consider an ARM with a low initial rate in order to achieve reduced monthly payments. As a result of refinancing, your total finance charges may be higher over the life of the loan.

Getting Out Some Cash

Are you refinancing mainly to "cash out" some home equity? It could be you're going on a much needed vacation; you need to pay college tuition for your child; or you plan to renovate your home. With this in mind, you will want to get a loan above the remaining balance of your existing mortgage.So you will need However, if your loan interest rate is high now and you've held it for a long time, you could be able to reach your goals without a rise in your mortgage payment.

Consolidating Debt

Perhaps you hope to cash out a portion of the home equity (cash out) to use toward other debt. If you have the home equity to make it work, taking care of other high interest debt (for example: car loans, credit cards, student loans, or home equity loans) means you can possible save several hundred dollars in your monthly budget.

Getting a Shorter Term Loan

Do you need to build up equity quicker, and have your mortgage paid off sooner? If this is your hope, your refinance can change you to a mortgage program with a short, like a 15 year loan. Although your monthly payment amount will usually be increased, you can be paying less interest; so your equity amount will rise up faster. But, you might be able to switch without much increase in your monthly payment if your longer term mortgage loan was closed a while ago, and the remaining balance is small. You could even pay less! To help you determine your options and the many benefits in refinancing, please call us at 915-274-3371. We are here for you.