Refinancing: Which Option is for You?
When you are overwhelmed with so many options, it may seem like there are even more loan programs than borrowers! Contact us at 701.222.0100 and we can match you with the loan program that fits you best. There are some general things to have in mind while you consider the choices.
Making Your Payments Lower
Are your refinance goals to lower your rate and consequently your mortgage payments? Then a low, fixed rate loan may be your best option. Perhaps you are presently in a loan with a high, fixed interest rate, or a mortgage with which the interest rate varies : an adjustable rate mortgage (ARM). Even if interest rates rise, a fixed-rate mortgage loan must remain at the same, low interest rate, unlike an ARM. If you plan to live in your home for at least five more years, a fixed-rate loan may be an especially good choice for you. On the other hand, if you can see yourself selling your home within several years, an ARM mortgage with a small initial rate may be the best way to bring down your monthly payments.
Getting Out some Cash
Are you planning to cash out some of your home equity with your refinance? Perhaps you're going on a much needed vacation; you have to pay tuition for your college-bound child; or you plan to renovate your home. In this case, you will want to look for a loan for more than the remaining balance on your present mortgage.With this goal, you You will be looking for a loan for more than the current balance with your existing home loan in that case. However, if your interest rate is high now and you've held it for a long time, you could be able to accomplish your goals without making your mortgage payments increase.
Perhaps you hope to pull out a portion of the home equity (cash out) to put toward other debt. If you hold any debt with higher interest (like credit cards or vehicle loans), you may be able to take care of that debt with a loan with a lower rate through your refinance, if you have enough equity.
Getting a Shorter Term Loan
Are you hoping to fatten up your equity faster, and pay your mortgage loan off more quickly? If this is your wish, your refinance mortgage can change you to a mortgage program with a short, such as a 15 year loan. The mortgage payments will probably be more than they were with the long-term mortgage loan, but in exchange, that you will pay considerably less interest and can build up equity more quickly. But, you might be able to make the change without a higher monthly mortgage payment if your longer term mortgage was closed a while back, and the remaining balance is somewhat low. You may even pay less! To help you determine your options and the many benefits in refinancing, please call us at 701.222.0100. We are here for you.
Want to know more about refinancing? Give us a call at 701.222.0100.