Here are some great reasons why you might refinance your mortgage!
Lower your mortgage rate and payment. This is one of the most common reasons that homeowners refinance their mortgage. If your current interest rate is higher than what is currently available in the market, it is probably a good idea to see how much you could save by refinancing. There are no-cost and low-cost options that could save you money with little to no investment.
Reduce your term. Take advantage of low rates to reduce the term of Mortgage loan. Shorter terms mean lower rates.
Convert your adjustable rate into a fixed rate. Adjustable rate mortgage (ARM) loans are a great way to ease into your payments, especially if you are a first time buyer or if you need lower payments initially. Eventually, if you decide you will stay in the home longer, you may want to consider refinancing that into a long term fixed rate loan. Doing so will give you peace of mind, knowing that your rate and payment will not change for a set period of time.
Convert your interest-only loan into a fully-amortized loan. Like ARMs, interest-only mortgage loans are a great way to minimize payments at the beginning; however, because you are not paying any principal, your loan balance does not decrease. If you plan to keep your home long term, you probably want to start paying off your loan. Often, you can refinance your interest-only mortgage loan to a 30 year fixed mortgage loan while keeping your payments about the same. Our Loan Officers will help you find the best solution.
Remove mortgage insurance. If you purchased a home with less than 20% down, chances are you're paying private mortgage insurance (PMI). Refinancing will help you eliminate the extra expense if you've paid down your balance and/or have seen an increase in your home's value to a point where you have at least 20% equity in, or a loan-to-value (LTV) of 80% or less.
Convert your 30 year loan to a shorter-term loan. Sometimes plans change and the home that you thought you were going to have for awhile turns from a permanent situation into a temporary one. If you are planning to sell sooner than you thought and no longer need a long-term rate, then you may consider converting your 30 year fixed to either an ARM or a 3/1, 5/1, or 7/1 loan program, which often have lower rates and payments
Take cash out to consolidate your debt. Leveraging your equity is one of the smartest ways you can make your money can work for you. Use the cash from to pay off higher interest, non tax-deductible credit cards, student loans, or medical bills. By consolidating your debts, you can enjoy the benefit of having only one payment each month, and in most cases your overall monthly outflow decreases
Take cash out for home improvements. What better way to use your hard earned equity than to invest it back with repairs or home improvements? Whether you would like to fix your leaky roof or update your kitchen, you can tap into your equity and have a tax deductible* way to tackle your projects. *consult with your tax advisor
Take cash out to purchase investment property. With home prices and interest rates at the lowest they've been in years, if you've been thinking about buying a vacation home or an investment property, now may be a great time to take action on your Mortgage Loan. Tap into the equity and use the cash for your down payment, home improvements, or for any reason at all.
The Process of Refinancing
Step 1: What are your goals refinancing your mortgage?
One of the most important steps before deciding whether or not refinancing can benefit you is to determine what your objectives are. Is your goal to reduce your monthly payment or pull cash out of your equity for home improvements or debt consolidation? Are you looking to fix your adjustable rate? Once you determine your goals, you can take at look at the various loan programs available to decide which loan option helps you achieve those goals.
Step 2: Inquire online or call one of our licensed Loan Officers
Once you've defined your goals and researched all the loan options available, you can submit your information online or pick up the phone to speak with one of our mortgage experts. Your Loan Officer can answer any questions you have about the loan program you're considering or can make a recommendation for you given your individual goals. We'll make sure that you understand every detail of your loan program and answer any questions you have before moving forward. When you're ready, you can apply online or call us to speak with a licensed Loan Officer
Step 3: Select your loan program
If you decide you'd like to move forward with the refinance, your Loan Officer will confirm your loan program, rate, and payment and will answer any questions you may have. At this point, you can lock in your interest rate to protect you against any fluctuations in the market.
Step 4: Submit your documents
Your licensed Loan Officer will provide you a list of items for you to send us so that we can verify all your information to get your loan approved and closed quickly. We will also send you some preliminary disclosures such as the good faith estimate and truth-in-lending disclosure to review and sign which detail the terms of your rate and loan. In a few days, we will contact you to schedule the appraisal inspection. It is important to schedule the appraisal appointment as quickly as possible to prevent any delays in your closing.
Step 5: Processing
After we receive all your documents, your Processor will contact you to go over the next steps, which includes ordering the preliminary title report, and coordinating with all the necessary parties to ensure your loan progresses smoothly and quickly. Once we have everything we need, your loan file will be submitted to the underwriter for review and formal approval
Step 6: Close your loan
Upon approval, we will contact you to schedule a loan document signing appointment.This appointment will generally take 30 minutes to an hour and can be done at the convenience of your home or at an approved settlement location.