Basics of refinancing a home
Refinancing your existing mortgage loan can provide you some positive results such as:
Lower Your Monthly Payment
If market interest rates are lower than your current rate you may have the opportunity to reduce your monthly mortgage payment. For instance, a 1 point reduction in your rate on a $250,000 existing mortgage loan can result in a $150 a month lower payment.
Shorten your term
If you took your original loan on a 30 year term you can refinance to a shorter term and pay your home off faster. Your payment may go up however, you will pay less interest over the term of the loan and pay your home off faster.
Change from an Adjustable Rate loan to a Fixed Rate loan
If your interest rate is subject to change or has changed then your payment is also subject to change. If your rate goes up your payment will go up and vice versa. Refinancing to a Fixed Rate Loan will prevent those fluctuations. You can also change from a Fixed Rate Loan to an Adjustable Rate Loan to see increased savings. Adjustable Rate Loans typically have lower rates and if you know you are only staying in your home for a few more years an Adjustable Rate Loan may be a good option for you.
Take Cash Out
If you have equity in your home a Cash – Out Refinance Loan may be right for you. You can use the proceeds to pay off existing debt, make home improvements, pay for your kids education or purchasing a new vehicle. The choice is your as the money is your equity.
Talk with your Mortgage Consultant today if you want to see if Refinancing is right for you!