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Which refinancing option
is best for you?
There aren't quite as many loan programs as there are
borrowers, but it seems like it sometimes! We'll work
with you to qualify you for the best loan program to
fit your needs. But there are some general refinancing
considerations you can have in mind in advance.
Are you refinancing
primarily to lower your rate and monthly 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, unlike your ARM, when you qualify for a fixed-rate
mortgage you lock that low rate in for the life of your
loan. This is especially a good idea if you don't think
you'll be moving within the next five years or so. On
the other hand, if you do see yourself moving within
the next few years, an ARM with a low initial rate might
be the best way to lower your monthly payment.
Are you refinancing
primarily to cash out some home equity? Maybe you want
to pay for home improvements, pay your child's college
tuition bill, take your dream vacation, whatever. Then
you'll want to qualify for a loan for more than the
balance remaining on your current mortgage. If you've
had your current mortgage for a number of years and/or
have a mortgage whose interest rate is higher, you may
be able to do this without increasing your monthly payment.
You want to cash out some equity
to consolidate other debt? Good idea! If you have the
equity in your home to make it work, paying off other
debt with higher interest rates than the interest rate
on your mortgage -- for example, credit cards, home
equity loans, car loans, some student loans -- means
you can save possibly hundreds of dollars a month.
Do you want to build up home
equity more quickly, and pay off your mortgage sooner?
Consider refinancing with a shorter-term
loan, such as a 15-year mortgage. Your payments will
be higher than with a longer-term loan, but in exchange,
you will pay substantially less interest and will build
up equity more quickly. If you have had your current
30-year mortgage for a number of years and the loan
balance is relatively low, you may be able to do this
without increasing your monthly payment -- you may even
be able to save! For example, let's say years ago you
took out a $150,000 30-year mortgage at eight percent.
Your payment is about $1,100, exclusive of taxes, insurance
and so on. If your balance today is down to $130,000,
you might take out a 15-year mortgage at six percent
and have an almost identical monthly payment. This is
a great option for people whose main goal is not to
save money on their monthly payment but rather want
to build up equity and pay off their home more quickly.
Get started now and
apply online now: VA
Online Home Mortgage Loans
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