Refinancing: Which Option is for You?
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The huge number of refinance options available can be overwhelming. Call us at (208) 726-5466 and we'll help you qualify for the perfect refinance program for your financial needs. There are several things to keep in mind while you look at your options.
Lowering Your Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? If so, your best choice may be a low fixed-rate loan. Perhaps you are currently in a loan with a high, fixed interest rate, or a mortgage loan in which the interest rate varies - an adjustable rate mortgage (ARM). Even when rates rise later, unlike with your ARM, when you qualify for a fixed-rate mortgage, you lock in that low rate for the term of your mortgage. This is particularly a wise option if you aren't planning a move within the next five years or so. However, an ARM with a initial low 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
Is your refinance goal primarily to pull out some of your home equity for an infusion of cash? Your home needs renovating; your son has been accepted to college and needs tuition; or you are planning a special vacation. Then you will need to look for a loan for more than the remaining balance on your existing mortgage loan.With this goal, you'll want to qualify for a loan for a higher number than the balance remaining on your existing mortgage loan. However, if your interest rate is currently high and you've held it for a long time, you could be able to reach your goals without making your mortgage payments increase.
Do you hold other debt, maybe with higher interest, that you need to consolidate? If you have the equity in your home to make it work, paying off other debt with higher interest than the rate on your mortgage (like credit cards, home equity loans, or car loans) means you may be able to save several hundred dollars in your budget each month.
Paying it off Sooner
Do you plan to build up home equity more quickly, and have your mortgage paid off sooner? You should consider refinancing with a shorterterm loan, often a 15-year mortgage loan. The payments will probably be more than with the longer term mortgage, but the pay-off is: you will pay considerably less interest and can build up equity quicker. On the other hand, if your existing long-term mortgage has a small balance remaining, and was closed a while ago, you may be able to make the switch without paying more each month. To help you determine your options and the numerous benefits in refinancing, please call us at (208) 726-5466. We will help you reach your goals!
Want to know more about refinancing your home? Give us a call at (208) 726-5466.