Which financing option is best for you?

•  To reduce your rate and monthly payment
•  To access the equity in your home for cash
•  To convert to a fixed rate from an adjustable    rate 

Are you refinancing primarily to lower your rate and monthly payments?

Almost all refinances occur when interest rates fall, and customers take advantage of this by refinancing to a lower fixed rate mortgage.  Fixed rate mortgages are viewed by most as a lower risk mortgage, maintaining one rate even if the market fluctuates upward and rates begin to rise. 

But interest rates aren't always on a downward trend.  You can still reduce your monthly payment by refinancing to a lower rate adjustable mortgage for short term savings.  This may be an ideal option especially if you don't anticipate staying in the home past the adjustment term.

Are you refinancing primarily to access the equity in your home for cash?

The equity you have in your home increases each time you make a home loan payment.  By refinancing, you can free up some of this money for other purposes.  You may need it for a child's college tuition, home improvements, or to invest in a second home.

The equity in your home may also be used for debt consolidation.  Generally, the interest on home loans is tax deductible while the interest on other types of loans is not tax deductible.  You may save money if you consolidate credit card payments, car loans and other loans by refinancing your mortgage.  In this situation, your debts have been restructured under your mortgage and the interest may be tax deductible.  (Consult your tax advisor regarding the potential deductibility of interest under the plan.)

The cash you are able to receive depends on the equity you have available and the refinance product you choose.  I can help you decide the best option for your specific need.

Are you refinancing primarily to convert to a fixed rate?

An adjustable rate mortgage is a product that allows you to enjoy home ownership with low monthly payments and may be the only option for you at the time of your purchase.  But the possibility of increasing rates and payments can be worrisome.

To reduce the uncertainty of future rates and payments, you might want to consider switching to the security of a fixed rate loan as soon as your financial status improves.  Fixed rate mortgages are viewed by most as a lower risk mortgage by maintaining one rate for the duration of the loan.  Even if the market fluctuates upward and rates begin to rise, you will feel secure in knowing your rate will remain constant.  Apply today or contact me for assistance.