Which refinancing option is best for you?

There are many reasons to refinance a mortgage.  One of the primary reasons, particularly with today's low interest rates is to lower your interest rate and thus reduce your monthly payment.  Or you may be thinking you'd like to pay off the remaining balance of an old mortgage more quickly - so maybe you'd like to switch from a 30 year fixed rate loan to a 15 year loan.  Many people are also faced with Adjustable Rate Mortgages (ARMS) that are about to reset to a higher interest rate.  Whatever the reason, there are still many options available for homebuyers to refinance their mortgages.  And with today's low rates the timing couldn't be better.  Keep reading for more information on refinancing options.

Lower Rate and Lower Month Payments? Then your best option might be a low fixed-rate loan. Maybe you have a fixed-rate mortgage now with a higher rate, or maybe you have an ARM -- adjustable rate mortgage -- where the interest rate varies. Even if it's low now, it may be a good time to lock it in for the life of the loan by switching to a fixed rate. This is especially a good idea if you don't think you'll be moving within the next five years or so.

Shorten the Length of Time and/or Total Interest Paid?  With today's low rates, you may be able to shorten the number of years on your mortgage and not increase the monthly payment by too much or possibly even decrease it, depending upon what your current interest rate is.  By converting from a 30 year fixed rate to a 15 year fixed rate loan, you can decrease the amount of total interest that you will pay over the remaining years. For instance if you have a  30 year mortgage with an original balance of $250,000 and rate of 6% with 15 years remaining and current balance of $175,000, and you convert to a $180,000 mortgage (to cover closing costs) for 15 years at a rate of 4.5%, you can reduce your monthly payment form $1498 to $1377 and save over $20,000 in interest over the remaining years

Refinancing primarily to cash out some home equity? If you've owned your home for a while you may have built up equity in your home.  In other words your home is worth a good bit more than what you owe on it.  You may be able to take out some of the equity in your home to pay for home improvements, pay your child's college tuition bill, take your dream vacation, or just consolidate some debts.  We can help you determine if you qualify for a "cash out refinance".

Refinance when home is worth less than what you owe on it?  Believe it or not there are programs available to allow homeowners to refinance even if they owe more than what the home is worth - up to 125% of the current home value.  For more information on this program see MAKING HOME AFFORDABLE program.