Let Us Find The Best Refinance Options For You!

Which Refinance Option Is Right For You?

Take Cash Out

A cash out refinance is a great way to utilize the equity in your home to put more cash in your pocket tax-free. Since mortgage interest rates are generally lower than other debts, it can be a great option for consolidating debt. In addition, mortgage interest is also, generally, tax deductible while the interest on other debts usually isn’t.

Some common reasons for a Cash Out Refinance are:

  • Pay Off High Interest Credit Card Debt
  • Pay Off Student Loan Debt
  • Get Cash For Home Repairs or Additions

If you have been paying on your home loan for awhile, or looking to take advantage of recent increases in property value, a Cash Out Refinance may be right for you!

Lower Payment

A lower mortgage payment can help free up some of your monthly budget for other things. There are a few ways that a refinance may help you to be able to lower your monthly mortgage debt obligation. Some common ways a refinance can help lower your monthly payment are:

  • Lower Your Interest Rate – If rates are lower than when you purchased your home, a lower interest rate will lower the amount of interest you pay monthly freeing up short term savings while giving you BIG savings over the life of the loan
  • Lower or Eliminate Mortgage Insurance – If you put less than 20% down when you purchased your home, you are probably paying mortgage insurance, a monthly fee to protect your lender in the event you default on the loan. By refinancing, you may be able to reduce, or even eliminate, your monthly mortgage insurance payment
  • Change Your Mortgage Term – By lengthening your mortgage term, you pay your total mortgage off over a longer period of time, making your monthly payments lower.

Shorten Term

Shortening your mortgage term is a great way to save the amount of money you spend on interest. Generally, shorter term mortgages mean a lower interest rate. A lower rate, and fewer years of payments can lead up to big long term savings or help you own your home faster.

How does it work? Well, let’s say you took out a 30 year mortgage at a 3.5% interest rate. You would be paying approximately $123,000 interest over the course of 30 years. However, if you cut that term in half, you would pay about $57,000 in interest over 15 years. That is a a savings of $66,000 without even taking into consideration that a shorter term mortgage would generally provide you with a lower rate.

An important thing to keep in mind with a shorter mortgage term is that it will generally INCREASE your monthly payment, however, less of your payment will go towards interest and more towards paying down your loan balance enabling you to build equity and pay your home off faster.

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