Refinancing: Which Program is for You?
There are not as many refinance loan options as there are borrowers, but it seems like it sometimes! Contact us at 218-237-5128 and we can match you with the refinance loan program that best fits you. What are your goals for your refinance loan? Considering in mind the following will help you begin your decision process.
Reducing Your Monthly Payments
Is your refinance primarily to lower your rate and monthly payments? In that case, applying for a low, fixed-rate loan could be a good option for you. Maybe you are presently in a loan with a high, fixed interest rate, or a mortgage loan with which the interest rate varies : an adjustable rate mortgage (ARM). Even if rates get higher later, unlike with your ARM, when you get a mortgage with a fixed rate, you set the low interest rate for the term of your loan. If you aren't expecting to sell your home 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 mortgage payments if you expect to move in the next few years.
Are you hoping to cash out some of your equity with your refinance? Your house needs updating; your daughter has gone to college and needs tuition money; or you have a special family vacation planned. With this in mind, you will need to get a loan above the remaining balance of your existing mortgage loan.With this goal, you want to qualify for a loan for a bigger amount than the remaining balance on your existing mortgage loan. However, if your loan interest rate is high now and you've held it for a long time, you may be able to reach your goals without making your monthly payments higher.
Consolidating Your Debt
Do you hold other debt, maybe with higher interest, that you want to consolidate? If you have the home equity for it, paying off other debt with higher interest than the rate on your mortgage (for example: home equity loans, student loans, or credit cards) means you may be able to save hundreds of dollars in your budget each month.
Getting a Shorter Term Loan
Are you planning to fatten up your home equity faster, and pay your mortgage off more quickly? You should consider refinancing to a shorterterm loan, often a 15-year mortgage. Your monthly payments will likely be more than with a long-term mortgage, but the pay-off is: that you will pay quite a bit less interest and will build up equity quicker. 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 change without paying more each month. To help you figure out your options and the numerous benefits in refinancing, please contact us at 218-237-5128. We can help you reach your goals!
Want to know more about refinancing your home? Call us at 218-237-5128.