Refinancing: Which Option is for You?
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The huge number of refinance options available is truly breathtaking. We can guide you to find the refinance loan program that can fit your financial situation the best. Contact us at 773-557-1000 to begin the process. There are some general things to bear in mind as you look at your choices.
Lowering Your Payments
Are your refinance goals to lower your rate and consequently your mortgage payments? Then your best option may be a low fixed-rate loan. Maybe you are currently in a mortgage loan with a high, fixed interest rate, or a loan in which the rate of interest varies - an adjustable rate mortgage (ARM). Unlike the ARM, your low fixed rate mortgage will stay at a certain low rate for the life of the mortgage loan, even when interest rates rise. If you are not expecting to sell your home in the near future (about 5 years), a fixed rate mortgage loan can especially be a great option. However, an ARM with a initial low payment could be a smarter way to reduce your mortgage payments if you expect to move in the near future.
Refinancing to Cash Out
Are you planning to cash out some of your equity in your refinance? It could be you're going on a much needed vacation; you need to pay tuition for your college-bound child; or you are updating your kitchen. Then you'll want to apply for a loan for more than the balance remaining of your current mortgage.With this goal, you'll You will be looking for a loan for more than the remaining balance with your existing mortgage loan in that case. You may not increase your monthly payment, though, if you have had your existing mortgage for a long time, and/or your interest rate is high.
Perhaps you want to pull out some equity (cash out) to put toward other debt. If you have the equity in your home for it, paying off other debt with higher interest than the rate on your mortgage (like credit cards, home equity loans, or car loans) means you can possible save hundreds of dollars a month.
Building up Equity Faster
Are you hoping to fatten your equity faster, and pay your mortgage off more quickly? If this is your plan, your refinance loan can change you to a mortgage program with a short, for example: a 15 year loan. You will be paying less interest and growing your home equity more quickly, even though your mortgage payments will usually be higher than they were. However, if you've had your existing thirty year loan for a number of years and the loan balance is somewhat low, you may be able to do this without raising your monthly mortgage payment — it's even possible to save! To help you determine your options and the many benefits in refinancing, please contact us at 773-557-1000. We can help you reach your goals!
Want to know more about refinancing? Give us a call at 773-557-1000.