Which Refinancing Option is Right for You?
If you ever wanted to get a million search results, go to the internet and search, “mortgage options”.
There is no lack of information online – however, factors go into determining whether a refinance makes sense for you or not. Refinancing your loan has a variety of benefits and may be the best – or only – option to eliminate financial stress and worry or achieve other financial goals. Here are some of the most common reasons people choose to refinance their homes:
Lower Your Payment
Having a lower payment gives you additional funds each month to allocate towards other expenses or financial goals. If this is your motivation, then a low-fixed rate loan might be your best choice. Getting into this type of loan will assure that you will lock in a low rate for the entire term of the loan. If you are planning to stay in your home for over five years this may be a great choice.
But, if you do plan to sell in the near future, you may want to consider an Adjustable Rate Mortgage (ARM) with a low initial rate in order to lower your payment. If you do move forward with this loan, pay close attention to any prepayment penalties outlined in the terms.
Refinancing to Get Cash Out
Utilizing your equity to get cash out is a popular choice for homeowners that want to utilize the cash for a financial goal that they have. Reasons for getting cash out could be for:
- Home Improvements
- Assisting with college tuition bills
- Pay for the family dream vacation
- Other investments or contribute to a retirement plan
- Startup capital for your new business venture
Regardless of your intention, getting cash out can help you achieve your desire. With this in mind, you must understand that your new loan will have a larger balance than your existing mortgage.
The potentially good news is if you have a high-interest loan right now and you are able to refinance with a lower interest rate, you could be able to accomplish your goals without an increase to your payment.
Consolidating Your Debt
Are you throwing money into the wind each month?
It may come as a surprise and pain you that you are paying more for your credit card and revolving debt than you need to.
Many homeowners have never considered or realized that you can utilize the equity of your home to pay off high-interest credit card debt or even a high-interest home equity loans.
Obtaining a new loan to pay off a sizable amount of credit card debt will give you a sigh of relief and you will no longer have to feel the burden of making a monthly credit card payment where most of it gets allocated towards interest instead of the principal.
When we provide a debt consolidation loan to pay off your debt and see your reaction we get a satisfying feeling and it is rewarding for us to see that you have accomplished some of your financial goals!
Paying off Your Loan Sooner
The reality of paying off your home faster is closer than you think.
You can reduce your term to 20, 15 or even 10 years or less if you wish. By doing so you will be paying less interest and you will build up your equity at a faster pace.
This loan will usually increase your monthly payments, we can help you determine what the best term is based on your budget and goals.
If you have held your existing 30-year mortgage for a long time and the loan balance is low, we could reduce your term without increasing your payment.
Contact us today so we can help you understand your options and explain in detail the benefits you could experience by refinancing.
It’s our goal to help you reach your goals!!!
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