Refinancing: Which Loan Program is for Your Family?

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There aren't as many loan programs as there are applicants, but at times it feels like it! Call us at 812-989-9358 and we can match you with the loan program that fits you best. In the interest of looking at your choices, you should list what you want to achieve with your refinance.

Reducing Your Monthly Payments

Are getting lower payments and a lower rate your main reasons for refinancing? In that case, a low, fixed rate loan may be the best loan program for you. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loan programs that you might want to refinance. Even when rates get higher later, unlike with your ARM, when you get a fixed rate mortgage, you lock in the low rate for the term of your mortgage. If you expect to live in your home for at least five more years, a loan with a fixed rate may be an especially good fit for you. However, an ARM with a initial low payment could be a wiser way to reduce your mortgage payments if you plan on moving in the next few years. Due to refinancing, your total finance charges can be higher over the life of the loan.

Cashing Out

Are you hoping to cash out some of your home equity with your refinance? Your house needs improvements; your daughter has been accepted to University and needs tuition money; or you are planning a special vacation. With this in mind, you need to qualify for a loan above the balance remaining of your current mortgage.Then you will need However, if your mortgage rate is currently high and you have held it for a long time, you could be able to accomplish your goals without making your mortgage payments bigger.

Debt Consolidation

Perhaps you'd like to cash out some of the equity in your home (cash out) to use toward other debt. If you own some debt with high interest (like credit cards or vehicle loans), you may be able to take care of that debt with a loan with a lower rate with your refinance, if you have the right amount of equity.

Building up Equity Faster

Are you planning to fatten your home equity faster, and pay off your mortgage sooner? In that case, you need to find out about refinancing to a short term mortgage - such as a fifteen-year loan. Even though your mortgage payments will probably be increased, you can save on interest; so your home equity will rise up faster. However, if you have held your existing thirty-year loan for a number of years and the remaining balance is somewhat low, you may be do this without raising your monthly mortgage payment — you might even be able to save! To help you understand your options and the multiple benefits in refinancing, please call us at 812-989-9358. We are here to help you reach your goals!