Is it Time to Explore Refinancing?

Refinancing your home loan to a lower interest rate or shorter term may result in significant savings. As economic conditions change, you want to be sure you still have the best home financing arrangement for your current and long-term financial goals. Is refinancing right for you, right now? This information may help you decide:

1. HOW FAR BELOW WHAT YOU PAY NOW DO INTEREST RATES HAVE TO GO BEFORE REFINANCING MAKES SENSE?
2. HOW MUCH TIME AND MONEY WILL IT COST TO REFINANCE?
3. SHOULD I CHOOSE AN ARM OR A FIXED-RATE MORTGAGE?
4. WHAT IS A CASH-OUT REFINANCE?

1. HOW FAR BELOW WHAT YOU PAY NOW DO INTEREST RATES HAVE TO GO BEFORE REFINANCING MAKES SENCE?
That often depends on how long you plan to stay in your home. Typically the fewer number of years, the wider the spread needs to be. We can help you weigh the costs of refinancing against the projected monthly savings you may realize.

2. HOW MUCH TIME AND MONEY WILL IT COST TO REFINANCE?
Again, that will depend on your specific financial profile. Applying for a refinance loan involves a process similar to getting a home purchase mortgage, and you will be charged certain fees. There are programs available that can greatly reduce the amount of documentation required, which can speed up the amount of time it takes to complete you loan.

3. SHOULD I CHOOSE AN ARM OR A FIXED-RATE MORTGAGE?
Most ARMs adjust annually, either up or down. So even at a below-market start rate, it is possible your ARM interest rate could soon exceed current interest rates. If you plan to remain in your home for a short period, an intermediate ARM, with low introductory rate that remains fixed for several years before the first adjustment, may be best suited to your needs. We would be happy to run various loan program scenarios to help you balance all the factors and make an informed decision.

4. WHAT IS A CASH-OUT REFINANCE?
Cash-out refinancing is a transaction in which a new mortgage is issued that is greater than the outstanding unpaid principal balance of the previous mortgage. Cash-out transactions allow homeowners to spend the equity they have accumulated in their homes. This equity can be used to pay down debt, remodel, pay college tuition, etc. We can take a look at you current equity and goals and give you the options that will be best for you and your family.
Many homeowners consider refinancing when interest rates suddenly fall or there's a change in financial circumstances. But even though a large decline in rates or an opportunity to pay off debts might make refinancing seem like an easy decision, you shouldn't consider any single variable on its own. Think about how long you plan to stay in your home, how you plan to use your equity, and how a refinance will support your overall financial goals.