Refinancing Made Easy
At American United, we understand that for many homeowners your home is probably your biggest investment. Therefore your decision to refinance is important and requires careful consideration.
Is now the right time for you to refinance?
The answer to this question usually depends on your reason for doing so. Here are five of the most common reasons for refinancing;
Lower your monthly payment
If your goal is to lower your monthly mortgage expense, refinancing to a long term fixed rate loan may be an option for you. Interest only loans and Hybrid ARM loans are also worth exploring. Since each of these mortgages comes with trade-offs, it’s best to explore all your options with your American United Lending Professional before you apply.
Lower your interest rate
Refinancing your mortgage to a lower rate loan can reduce your monthly payment and the amount of interest you pay. If you plan to keep your home for many years, refinancing to a low 15, 20 or 30 year loan may be the right option for you. If you plan on selling your home in 5 to 10 years, you might consider a lower rate Hybrid loan, which combines the benefits of a fixed rate loan with the below market rate of an adjustable mortgage.
Pay your mortgage off faster
Refinancing a 30 year loan to a shorter term, like a 15 year or 20 year loan, will help you to pay your loan off faster. This can significantly reduce the interest cost over the life of your loan. However, the tradeoff is that your mortgage payment will most likely be higher, even if the new loan is at a lower interest rate than your current rate.
Convert an ARM to a fixed-rate mortgage.
If you plan to keep your home for a long time, taking a fixed loan with a higher rate than your current ARM may make sense in the long run. It keeps you safe from inflation and makes budgeting easier. In this case, the 15, 20 and 30-year fixed mortgages are worth exploring.
Cashing out on equity
By borrowing against the equity in your home you can take advantage of a low cost way to get needed cash. And because mortgage interest is usually tax deductible, pulling the equity out of your home is typically less costly than high rate consumer loans. Most homeowners use the equity in their home for debt consolidation, home improvement, college tuition bills, or to finance the down payment on a second property. (Consult your tax advisor for tax information.)
Whether your goal is to lower your monthly payment, pay your loan off faster, convert to a fixed rate or simply access the cash you need, your American United Lending Professional can help you determine if refinancing today will help you achieve your goal.
To find out if refinancing is right for you, call or email a local American United Lending professional today.