Choosing a Refinancing Loan

There aren't as many refinance loan options as there are applicants, but it feels like it at times! Call us at (718) 477-4405 and we can work with you to qualify you for the best refinance loan program for your financial situation. In the interest of looking at your choices, you should consider your goals for the refinance.

Lowering Your Payments

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 currently have a fixed-rate mortgage with a higher rate, or perhaps you hold an ARM — adjustable rate mortgage — in which the rate of interest can vary. Even if interest rates rise, a fixed-rate mortgage will remain at the same, low interest rate, unlike an ARM. This can be especially a wise option if you don't expect to move within the next five years or so. But if you do expect to sell your home more quickly, you should consider an ARM with a low initial rate to get reduced monthly payments.

Getting Out some Cash

Is your refinance goal mainly to "cash out" some home equity? It could be you want to update your kitchen, take care of your college kid's tuition, or take your family on a dream vacation. Then you need to get a loan for more than the balance remaining of your existing mortgage.In that case, you will want to qualify for a loan for a higher amount than the remaining balance on your current mortgage loan. If you've had your existing mortgage for quite a while and/or have a loan whose interest rate is high, you may be able to do this without making your monthly payment bigger.

Consolidating Debt

Maybe you hope to pull out a portion of the home equity (cash out) to put toward other debt. If you have the home equity for it, taking care of other debt with higher interest than the rate on your mortgage (such as credit cards, home equity loans, or car loans) means you can save possibly several hundred dollars a month.

Paying it off Faster

Are you dreaming of paying off your loan faster, while building up your equity faster? If this is your wish, your refinance loan can move you to a mortgage loan program with a shorter term, such as a 15 year loan. The mortgage payments will likely be higher than they were with a longer term mortgage loan, but in exchange, that you will pay considerably less interest and will build up equity more quickly. However, if you have held your current 30-year loan for a long time and the loan balance is somewhat low, you might be able to do this without raising your monthly payment — it's even possible to save! To help you figure out your options and the many benefits of refinancing, please contact us at (718) 477-4405. We would love to help you reach your goals!

Curious about refinancing your home? Give us a call: (718) 477-4405.

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