Which Refinancing Option is Right for You?

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credit scoringWhen you are overwhelmed with so many options, it may seem like there are even more loan programs than borrowers! Contact us at (970) 577-9200 and we will match you with the refinance loan program that is best for your needs. There are some general things to keep in mind while you look at your choices.

Reducing Your Monthly Payments

Are your refinance goals to lower your rate and consequently your mortgage payments? If so, getting a low, fixed-rate loan could be a wise choice for you. An ARM (Adjustable Rate Mortgage) or a high fixed rate mortgage are loan programs that you may want to refinance. Even if rates come up later, unlike with your ARM, when you qualify for a mortgage with a fixed rate, you lock in the low rate for the term of your mortgage. This is especially a good option if you don’t think you will move within the next five years or so. However, an ARM with a low initial payment could be a better way to lower your monthly payments if you expect to move in the next few years.

Refinancing to Cash Out

Is “cashing out” your primary purpose for refinancing? Your home needs renovating; your son has gone to University and needs tuition money; or you are planning a special vacation. So you will want to get a loan for more than the remaining balance on your current mortgage loan.In that case, you will want to need to get a loan for a bigger number than the balance remaining on your present mortgage loan. You might not have an increase in your mortgage payment, however, if you’ve had your current mortgage loan for a long time, and/or your interest rate is high.

Debt Consolidation

Do you want to cash out a portion of your equity to consolidate additional debt? Excellent idea! If you have the equity in your home to make it work, taking care of 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 hundreds of dollars monthly.

Building up Equity Faster

Do you hope to build up equity more quickly, and have your mortgage paid off sooner? Then, you’ll want to look into refinancing to a short term mortgage loan – such as a fifteen-year loan. You will be paying less interest and increasing your home equity faster, although your payments will generally be bigger than you have been paying. On the other hand, if your existing longer term mortgage has a low balance remaining, and was closed a number of years ago, you may be able to make the move without paying more each month. To help you figure out your options and the multiple benefits of refinancing, please contact us at (970) 577-9200. We are here for you.

Curious about refinancing? Call us: (970) 577-9200.