Which Refinancing Option is Right for You?
Though there aren’t as many loan program choices as there are applicants, it may seem so at times! Call us at (401) 583-4150 and we can match you with the refinance loan program that best fits your needs. In order to review your choices, you should determine what you want to achieve with your refinance.
Lowering Your Payments
Are getting reduced monthly payments and an improved rate your main reasons for refinancing? In that case, the best choice might be a low fixed-rate loan. Maybe you are now in a mortgage with a high, fixed interest rate, or a mortgage in which the interest rate varies – an adjustable rate mortgage (ARM). Even when rates get higher later, unlike with your ARM, when you qualify for a fixed rate mortgage, you lock in that low rate for the term of your loan. If you expect to live in your home for at least five more years, a fixed-rate loan may be an especially good choice for you. But if you do plan to sell your home more quickly, you will want to consider an ARM with a low initial rate in order to achieve reduced payments.
Refinancing to Cash Out
Is “cashing out” your primary reason for your refinance? Maybe you want to make home improvements, pay your child’s college tuition bill, or take your family on a dream vacation. With this in mind, you need to get a loan higher than the balance remaining on your present mortgage.With this goal, you will want to need to get a loan program for a bigger number than the balance remaining on your existing mortgage loan. However, if your interest rate is high now and you have held it for quite a few years, you could be able to accomplish your goals without a rise in your mortgage payment.
Consolidating Your Debt
Do you want to cash out some of your home equity to consolidate other debt? Good plan! If you have built up some equity, paying off other debt with rates higher than your home loan (credit cards or home equity loans, for example) could be able to save you a chunk of cash every month.
Paying it off Sooner
Are you dreaming of paying your loan off faster, while building up your home equity faster? If this is your wish, your refinance can move you to a mortgage program with a short, like a 15 year loan. You will be paying less interest and increasing your home equity more quickly, even though your monthly payments will usually be bigger than you have been paying. However, if you’ve held your existing 30 year mortgage for a long time and the loan balance is rather low, you might be do this without raising your monthly payment — it’s even possible to save! To help you understand your options and the many benefits in refinancing, please contact us at (401) 583-4150. We would love to help you reach your goals!
- Fixed Mortgage Rates