Refinancing provides great opportunities for homeowners. Through refinancing, it may be possible to lower your monthly mortgage payments, lower interest or terms (15 yr or 10 yr term) enjoy the security of a fixed-rate mortgage, as well as to consolidate other debt to a lower interest rate and a single payment.
Here are some great reasons to refinance today!
Historically low rates
Government programs that may help you in certain situations (negative equity or upside down).
Explore other refinancing options. Wondering if refinancing makes sense in your situation? Request a free break-even analysis to see if refinancing is right for you.
Declining property values? Learn about refinance help from government programs If your outstanding loan balance is greater than the value of your home, the Home Affordable Refinance Program may be able to help you. This government program may be able to help homeowners refinance even when the outstanding balance is greater than the value of the home.
It’s designed for homeowners who:
Have Fannie Mae or Freddie Mac held or guaranteed mortgage loans
Are current on their mortgage payments
Have been unable to refinance their mortgage loans because the home’s value has declined
Have an adjustable-rate mortgage (ARM), interest-only or balloon mortgage convert to fixed.
New refinance options for decreased values
The Home Affordable Refinance Program is:
Available with fixed-rate and some adjustable-rate products
Designed to help you refinance through flexible eligibility criteria
For homeowners with mortgage loans that are held or guaranteed by Fannie Mae or Freddie Mac
To be eligible for the Home Affordable Refinance Program, you must be current on your mortgage payments.
This program is recommended for homeowners who:
Have been unable to refinance their mortgage because their home’s value has declined
Want to refinance their current adjustable-rate mortgage (ARM), interest-only or balloon mortgage loan into a more stable fixed-rate mortgage and make full principal and interest payments each month
Depending on the circumstances there are a variety of possible benefits to refinance, including:
Lower monthly payments Often, when you have enough equity, you may refinance without any additional down payment and still lower your monthly payments. Also, refinancing under a different loan structure may result in reduced monthly payments.
Lower interest rates Refinancing offers a number of options for lowering your interest rates:
Market interest rates may be generally lower inviting refinancing options before they rise again and the opportunity for locking in a low interest rate is gone
A special low-interest loan plan may be available
Your equity may be sufficient to allow for a restructuring of the interest plan (such as converting from an ARM to a low fixed rate mortgage)
Conversion of high-interest-rate debt (such as credit card debt) to low-interest-rate mortgage debt
Pay-down of a mortgage, providing options for better terms and less interest
Lower debt load A lower debt load may simply offer less monthly stress and a greater peace of mind. But it may also allow for more of your money to go into investments or retirement funds. A lower mortgage balance may qualify you to drop your Private Mortgage Insurance. For future loans, an increase in equity may provide more flexibility in terms and options (such as rolling equity for a down payment).
Tax breaks on home improvements Interest on second mortgages used for home improvements is generally tax deductible. Before deciding about a home improvement loan, a homeowner should consult with their accountant to determine the best tax advantages.
Restructured debt There are several ways in which restructuring debt may be advantageous. Some possibilities include:
Restructuring the payment plan (consider the bi-weekly mortgage plan which results in making an extra payment each year rather than the standard 12 monthly payments, reducing the total interest paid out and the loan life)
Restructuring payout terms (such as, switching a 30 year mortgage to a 15 year mortgage, which - depending on your equity position, type of loan, and terms - could result in some combination of lower interest, lower interest rates, reduced payment amounts, and a quicker building of equity and pay-down of your mortgage, or locking in an interest-rate option that could also reduce your interest, payments and loan length.
Restructuring the type of loan (possibly changing from an ARM to a fixed rate mortgage or from a seller-financed loan to a bank mortgage or adding on a second mortgage)
Restructuring the kind of debt (the proper balance of installment versus revolving loans affects your credit score)
Needed improvements, cash or other priority items Refinancing can be the answer to funding those expenses that don’t fit into the on-going or monthly payment cycle. You can use your equity as the means to obtain funding, often without increasing your monthly payment, sometimes even reducing the payment and the interest. Although there are many reasons a homeowner considers refinancing, there are concerns that should be weighed into the decision, such as:
· Will the upfront costs outweigh the benefits? · Will lower tax deduction due to decreased interest payments be advantageous? · Will there be prepayment penalties? (No generally our programs do not have these) · Will the long term and short term effects both be beneficial?
As your mortgage broker we can help you weigh these factors and determine if, when and what kind of refinancing might be best for you. To apply for refinancing click here and we will contact you with your best available options.
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