“We’re on a mission to make refinancing understandable. Give us a call and let us show you what we mean.”
- MR. COOPER
Refinancing is more straightforward than it seems. All it means is paying off your current loan and replacing it with a new one that better meets your needs. Of course there are details to consider along the way, and we are on board to guide you through them all, start to finish.
BASICS
“Refinancing has some great benefits. But as always, we’ll tell you both sides of the story.” - Mr. Cooper
CASH-OUT CONSIDERATIONS
PROS: You can turn your equity into cash without selling your home. (And the right remodeling project could increase your home's value.) If you use your cash out to consolidate debts (meaning pay off smaller debts), you could lower your total monthly debt obligations.
CONS: A cash-out refi sets back your progress paying off your loan. And be careful about debt consolidation—compared to, say, credit card debt or car debt, mortgage debt often has higher finance charges. Not to mention, you have more to lose if you can't pay it back.
SHORTENING THE TERM (LENGTH) OF YOUR LOAN
PROS: Many homeowners refinance for a loan with a 15 or 20-year term, which typically offer lower rates than 30-year loans. If you qualify for a shorter-term loan, You'll build equity in your home quicker and you could see big savings on interest.
CONS: Since you're paying the loan off sooner, you may not be lowering your monthly payment. In some cases, it might even go up. So even if you end up with long-term savings, in the short term it could mean a tighter budget.
SWITCHING FROM ADJUSTABLE TO FIXED RATE
PROS: If you have an adjustable rate mortgage and would prefer to lock in a predictable fixed rate, refinancing can make that happen if you qualify. When rates are low, many homeowners refinance for this reason (and feel really great when rates start to rise again).
CONS: Fixed rates are... fixed. So if you refinance from an ARM to a fixed rate and rates drop later, you may find yourself wishing you'd stuck with your ARM. Before refinancing from a fixed rate to an ARM, carefully consider the new loan's proposed initial fixed rate.
SHOULD I REFINANCE?
We should talk. Call us at 833-616-0514. If rates are falling and you'd like to take advantage of them, or if you'd like to explore turning your equity into cash, our highly-trained mortgage professionals will be glad to get on the phone with you and go over your options.
If you currently have an adjustable-rate mortgage, it's never a bad idea to be on the lookout for a low fixed rate. Whatever your loan type, give us a call and we can discuss how much much you might save or take out as cash in different scenarios.
LOWER YOUR RATE AND YOUR PAYMENT
PROS: Saving money is a good thing, which is why this is one of the most common reasons to refinance. If rates have dropped below those of your current loan, applying to refinance could snag you a lower rate and lower monthly payment.
CONS: Refinancing involves fees paid to us and to other service providers. We'll discuss some of the typical fees a bit further down. For now, you should just know that even if you refi to a lower rate, it may take a while for the savings there to offset the fees.
TAKING CASH OUT OF YOUR HOME
A "cash-out" refinancing is when you qualify to use some of your home's equity as cash for some valuable purpose. Common purposes include home remodeling, debt consolidation, and college tuition.
Let's say you still owe $50,000 on a home that's valued at $150,000. That means you have $100,000 in equity. If you're approved for a cash-out refi, you'll get access to a portion of that $100,000 to use (wisely). Of course, you'll need to pay back whatever you decide to take out.
CASH-OUT CONSIDERATIONS
PROS: You can turn your equity into cash without selling your home. (And the right remodeling project could increase your home's value.) If you use your cash out to consolidate debts (meaning pay off smaller debts), you could lower your total monthly debt obligations.
CONS: A cash-out refi sets back your progress paying off your loan. And be careful about debt consolidation—compared to, say, credit card debt or car debt, mortgage debt often has higher finance charges. Not to mention, you have more to lose if you can't pay it back.
SHORTENING THE TERM (LENGTH) OF YOUR LOAN
PROS: Many homeowners refinance for a loan with a 15 or 20-year term, which typically offer lower rates than 30-year loans. If you qualify for a shorter-term loan, You'll build equity in your home quicker and you could see big savings on interest.
CONS: Since you're paying the loan off sooner, you may not be lowering your monthly payment. In some cases, it might even go up. So even if you end up with long-term savings, in the short term it could mean a tighter budget.
SWITCHING FROM ADJUSTABLE TO FIXED RATE
PROS: If you have an adjustable rate mortgage and would prefer to lock in a predictable fixed rate, refinancing can make that happen if you qualify. When rates are low, many homeowners refinance for this reason (and feel really great when rates start to rise again).
CONS: Fixed rates are... fixed. So if you refinance from an ARM to a fixed rate and rates drop later, you may find yourself wishing you'd stuck with your ARM. Before refinancing from a fixed rate to an ARM, carefully consider the new loan's proposed initial fixed rate.
SHOULD I REFINANCE?
We should talk. Call us at 833-616-0514. If rates are falling and you'd like to take advantage of them, or if you'd like to explore turning your equity into cash, our highly-trained mortgage professionals will be glad to get on the phone with you and go over your options.
If you currently have an adjustable-rate mortgage, it's never a bad idea to be on the lookout for a low fixed rate. Whatever your loan type, give us a call and we can discuss how much much you might save or take out as cash in different scenarios.
LOWER YOUR RATE AND YOUR PAYMENT
PROS: Saving money is a good thing, which is why this is one of the most common reasons to refinance. If rates have dropped below those of your current loan, applying to refinance could snag you a lower rate and lower monthly payment.
CONS: Refinancing involves fees paid to us and to other service providers. We'll discuss some of the typical fees a bit further down. For now, you should just know that even if you refi to a lower rate, it may take a while for the savings there to offset the fees.
TAKING CASH OUT OF YOUR HOME
A "cash-out" refinancing is when you qualify to use some of your home's equity as cash for some valuable purpose. Common purposes include home remodeling, debt consolidation, and college tuition.
Let's say you still owe $50,000 on a home that's valued at $150,000. That means you have $100,000 in equity. If you're approved for a cash-out refi, you'll get access to a portion of that $100,000 to use (wisely). Of course, you'll need to pay back whatever you decide to take out.
CASH-OUT CONSIDERATIONS
PROS: You can turn your equity into cash without selling your home. (And the right remodeling project could increase your home's value.) If you use your cash out to consolidate debts (meaning pay off smaller debts), you could lower your total monthly debt obligations.
CONS: A cash-out refi sets back your progress paying off your loan. And be careful about debt consolidation—compared to, say, credit card debt or car debt, mortgage debt often has higher finance charges. Not to mention, you have more to lose if you can't pay it back.
SHORTENING THE TERM (LENGTH) OF YOUR LOAN
PROS: Many homeowners refinance for a loan with a 15 or 20-year term, which typically offer lower rates than 30-year loans. If you qualify for a shorter-term loan, You'll build equity in your home quicker and you could see big savings on interest.
CONS: Since you're paying the loan off sooner, you may not be lowering your monthly payment. In some cases, it might even go up. So even if you end up with long-term savings, in the short term it could mean a tighter budget.
SWITCHING FROM ADJUSTABLE TO FIXED RATE
PROS: If you have an adjustable rate mortgage and would prefer to lock in a predictable fixed rate, refinancing can make that happen if you qualify. When rates are low, many homeowners refinance for this reason (and feel really great when rates start to rise again).
CONS: Fixed rates are... fixed. So if you refinance from an ARM to a fixed rate and rates drop later, you may find yourself wishing you'd stuck with your ARM. Before refinancing from a fixed rate to an ARM, carefully consider the new loan's proposed initial fixed rate.