Looking to reduce your monthly mortgage payments? You may be able to save money with a refinance. Check out how!
When a borrower refinances their property or home, they are able to pay off the current loan with a new loan. This enables them to restructure the mortgage to better fit their needs. Borrowers who refinance could save a considerable amount of money over the life of the loan therefore improving their overall financial state.
Important Refinance Highlights
Refinancing may be the right decision if your home’s value has significantly increased over time or if the current interest rates are low. Securing a lower rate can help you save time and money throughout the lifetime of the loan. Be sure to discuss the market conditions with your mortgage professional. We’re always happy to help borrowers make educated and confident decisions.
When You Refinance, You May Be Able To:
- Shorten your loan’s term
- Refinance to a lower interest rate
- Convert your adjustable-rate mortgage (ARM) to a fixed-rate loan to secure a more ideal interest rate
- Consolidate a first and second lien to a single loan
- Consolidate debt from higher interest rate credit cards or subordinate financed loans into one loan
- Turn your home equity into cash
What Are My Refinance Options?
Replace your current mortgage with a new loan that is more than the amount owed. This option gives borrowers access to additional funds to help pay for major expenses. (ie: college tuition, debt or home improvements)
*Appraised property value may affect loan amount.
Adjustable-rate Mortgage (Arm)
Typically, an adjustable-rate mortgage offers lower introductory rates and payments that can change periodically after the initial fixed-rate period. Why would a borrower opt for an ARM? An ARM might be the right choice for you if you. . .
- Plan on staying in your home for a short time (ie: only a few years)
- You’re expecting a future pay increase
- The current interest rate on a fixed-rate mortgage is too high
More often than not, borrowers who opt for an ARM will be able to refinance to a Fixed-Rate Mortgage once mortgage rates have gone down or if they decide to stay in their home for a prolonged period of time. Your mortgage professional will be able to help you explore and understand your options here.
Protect yourself against rising rates. Interest rates are locked in for the lifetime of a FRM and will remain the same despite fluctuations in the market. Borrowers have the flexibility to select a 30-, 20- or 15-year term. Lower term options will have higher monthly payments. This allows borrowers to build home equity faster. If you plan on staying in your home for a longer period of time, a fixed-rate mortgage could be the preferable solution for you as it will allow for lower monthly payments to be made over a greater duration of time.
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