Refinancing: Which Loan Program is for You?

Even though it may seem like it sometimes, there aren't as many loan programs as there are applicants! Call us at (510) 682-3792 and we can help you qualify for the best loan program to fit your financial situation. What are your reasons for refinancing? Considering in mind the information below will help you begin your decision process.

Making Your Payments Lower

Are achieving reduced monthly payments and an improved rate your main refinance goals? Then a good option might be a low fixed-rate loan. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you may want to refinance. Unlike the ARM, your low fixed-rate mortgage stays at a certain low rate for the life of your loan, even as interest rates rise. If you aren't expecting to move in the near future (about 5 years), a fixed-rate mortgage can particularly be a great loan option. However, an ARM with a low initial payment could be a smarter way to reduce your monthly payments if you expect to move in the next few years.

Cashing Out

Are you hoping to cash out some of your home equity in your refinance? Perhaps you need to make home improvements, take care of your college kid's tuition, or go on a special family vacation. So you want to find a loan higher than the balance remaining of your existing mortgage.So you You'll be looking for a loan for more than the current balance on your existing mortgage in this case. However, if your loan interest rate is high now and you've had it for a long time, you could be able to accomplish your goals without making your monthly payments rise.

Consolidating Your Debt

Do you have other debt, perhaps with high interest, that you want to consolidate? 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 be able to save you a chunk of money each month.

Paying it off Faster

Are you wanting to fatten your equity faster, and pay off your mortgage loan sooner? Consider refinancing to a short-term loan, such as a 15-year mortgage loan. Although your mortgage payment amount will probably be more, you will save on interest; so your equity amount will rise up faster. However, if you've held 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 mortgage payment — it's even possible to save! To help you understand your options and the numerous benefits of refinancing, please contact us at (510) 682-3792. We would love to help you reach your goals!