Which Refinancing Option is Right for You?
When you are overwhelmed with so many choices, it may seem as if there are even more refinance programs than borrowers! We can guide you to select the loan program that can fit your situation the best. Call us at (317) 288-9434 to begin the process. What are your reasons for your refinance loan? Considering in mind the information below will help you begin your decision process.
Reducing Your Monthly Payments
Are you refinancing primarily to lower your rate and monthly payments? Then the best choice might be a low fixed-rate loan. Perhaps you currently have a fixed-rate mortgage with a higher rate, or maybe you have an ARM — adjustable rate mortgage — in which the rate of interest varies. Even as interest rates rise, a fixed-rate mortgage must stay at the same, low interest rate, unlike an ARM. This is especially a good idea if you don't think you'll be moving within the next five years or so. But if you do plan to sell your home more quickly, you will need to consider an ARM with a low initial rate to get lower monthly payments.
Refinancing to Cash Out
Is "cashing out" your main reason for your refinance? Your house needs updating; your daughter has gone to University and needs tuition; or you have a special family vacation planned. With this in mind, you'll want to look for a loan higher than the balance remaining on your current mortgage.Then you'll want to qualify for a loan program for a higher number than the remaining balance on your present mortgage. If you've had your current mortgage for a number of years and/or have a mortgage with high interest, you might\could be able to do this without increasing your monthly payment.
Do you have other debt, perhaps with a higher interest rate, that you need to consolidate? If you have the equity in your home for it, taking care of other high interest debt (like home equity loans, student loans, or credit cards) means you may be able to save several hundred dollars each month.
Paying it off Sooner
Are you wanting to fatten your home equity faster, and pay your mortgage loan off more quickly? If this is your plan, the refinance can move you to a mortgage loan program with a short, for example: a 15 year loan. Your monthly payments will likely be more than they were with your long-term mortgage, but the pay-off is: you will pay substantially less interest and will build up equity quicker. Conversely, if your existing long-term mortgage has a low balance remaining, and was closed a number of years ago, you might be able to make the move without paying more each month. To help you determine your options and the multiple benefits in refinancing, please contact us at (317) 288-9434. We are here for you.
Want to know more about refinancing? Give us a call at (317) 288-9434.