What Mortgage Is Best For You To Refinance Into?

With the large amount of home loan options available today it almost seems like there are as many loan types as there are home owners! At Mayfair mortgage we will help you decide on the right refinance option to fit your goals and finances. But before you begin need to have a general idea about your reasons for refinancing and the goals you have.

To Get a Lower Rate and Payment

Is your reason for refinancing to get a lower interest rate and reduced monthly payment amount? In this situation the best loan for you might be a low rate fixed mortgage.

You might currently have a fixed rate mortgage but have a high rate, or even an adjustable rate mortgage (ARM) that has a variable rate that can change. Even if it's low now, unlike your ARM, when you qualify for a fixed-rate mortgage you lock that low rate in for the life of your loan.

This is great for home owners that know they will not be relocating or refinancing again within the next five years. But if you see a property upgrade or moving in your future then the low introductory rate of an ARM loan might be the best way for you to maximize your monthly savings.

Get Cash Out

Are you wanting to access the equity you have in your home and pull cash out to improve your home, buy a new car, pay for college or any other reason? If this is your reason for refinancing then you must be able to qualify for a loan that is more then what your current remaining mortgage balance is. In some cases if you have a higher interest rate you can get the cash you need, reduce your rate and keep your payment the same or close to the same!

Consolidate Debt

Do you want to use the equity in your home to consolidate high interest credit card debt? This is a great idea that can help not only your finances by saving you hundreds of dollars a month but it can also help improve your credit scores by reducing your debt load! Just make sure that once your debt is paid off you do not spend your way back into debt again.

Pay Off Your Home Faster

Is your goal to build up home equity fast and pay off your mortgage sooner? If the answer is yes you should consider refinancing into a short term loan like a 10 year or 15 year home loan. You will have much higher payments when compared to a 30 year mortgage but you will pay thousands of dollars less in interest then you would on a longer term loan.

If you have had a long term loan for a long time and have a low remaining balance you may be able to switch to a shorter term loan and not increase your monthly payment or in some cases you can even lower it.

For example, let's say years ago you took out a $150,000 30-year mortgage at eight percent. Your payment is about $1,100, not including taxes and insurance. If your remaining balance today is down to $130,000, you might take out a 15-year mortgage at five or six percent and have an almost identical monthly payment.

This home loan option works out great for home owners who are not as concerned about saving money as they are with paying off their home faster and building equity.

Whatever your refinance goals are at Mayfair Mortgage we are more then happy to help you decide and find the refinance option that will fit your needs and goals. feel free to call us anytime at (414) 771-1200.