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Which Refinancing Program is Best for Me?

Even though it seems like it sometimes, there are not as many loan programs as there are borrowers!

Contact us at 310-791-0854 and we can match you with the loan program that is ideal for your needs. What do you hope to achieve with your refinance loan? Keeping in mind the following will help you begin your decision process.

Reducing Your Monthly Payments

Are your refinance goals to lower your rate and consequently your mortgage payments? In that case, getting a low, fixed-rate loan may be a wise option for you. Perhaps you currently hold a higher rate fixed rate mortgage, or perhaps you hold an ARM — adjustable rate mortgage — where the interest rate can vary. Even as interest rates rise, a fixed-rate mortgage loan must remain at the same, low interest rate, unlike an ARM. This is especially a good option if you don't think you'll be moving within the next 5 years or so. On the other hand, if you do see yourself moving before too long, an ARM with a small initial rate might be the best way to reduce your monthly payments. By refinancing your existing mortgage loan, you could wind up paying more in finance charges over the life of the loan.

Cashing Out

Are you hoping to cash out some of your equity with your refinance? Your house needs new carpet; your daughter has been accepted to University and needs tuition; or you have a special family vacation planned. With this in mind, you will want to look for a loan higher than the balance remaining of your existing mortgage loan.With this goal, you want to qualify for a loan for a higher number than the remaining balance on your current mortgage. If you've had your current mortgage loan for a long time and/or have a loan whose interest rate is high, you may be able to do this without making your mortgage payment bigger.

Consolidating Your Debt

Do you hold other debt, perhaps with a high interest rate, that you'd like to consolidate? If you have the equity in your home for it, taking care of other debt with higher interest than the rate on your mortgage (like home equity loans, student loans, or credit cards) means you can save possibly hundreds of dollars in your monthly budget.

Building up Equity More Quickly

Are you hoping to fatten up your home equity faster, and pay your mortgage off sooner? If this is your hope, the refinance loan can switch you to a mortgage loan program with a shorter term, such as a 15 year loan. Although your monthly payment amount will likely be more, you will save on interest; so your equity will build up faster. On the other hand, if your existing longer term loan has a small balance remaining, and was closed a number of years ago, you may be able to make the change without paying more each month. To help you understand your options and the many benefits of refinancing, please contact us at 310-791-0854. We will help you reach your goals!


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