Most people who refinance a mortgage do it to obtain the lowest interest rate for which they qualify. Currently, Americans have the opportunity to refinance at historically low interest rates on 30-year, 15-year and adjustable-rate mortgages (ARMs).
Common reasons for homeowners refinancing include gaining financial relief from underwater mortgages, lowering monthly mortgage payments, building home equity or all of the above. Some homeowners pull equity out of their homes to pay off credit card debt. Others desire to refinance into loans with shorter amortization, which build equity faster or correlate the final mortgage payments with retirement plans.
Depending on your personal circumstances, many homeowners who want to refinance their mortgage have a number of options compared to several months ago.
Which refinancing option suits your situation?
Rate and Term Refinancing
This allows you to borrow enough to pay off your current mortgage balance. You can either modify the interest rate on your loan, change the loan term or you may adjust both. For instance, you may change from a fixed-rate mortgage (FRM) to an adjustable-rate mortgage (ARM) if you don’t plan on staying in your home. A homeowner might also choose to refinance from an ARM into a FRM when the rate of an ARM is expected to adjust upwards. Your Cliffco loan specialist will educate you about the loan program that suits your personal needs.
This option leaves you with excess cash amount after you have paid off the current mortgage balance. You can extract cash proceeds from your home equity.
Streamline refinancing refers to the documentation and underwriting carried out by any lender in order to find out if the borrower would qualify for a refinance loan. This is a kind of loan program that doesn’t require any credit verification, but may or may not require an appraisal.
A mortgage refinance represents one of the most important financial transactions you will ever make. Count on your Cliffco mortgage specialist to educate you on the loan products and refinancing options suited for you! See below for a guide exploring the benefits and types of refinancing in detail.
FREE same day pre-qualification makes refinancing easy!
Contact Cliffco Mortgage Bankers, your Long Island mortgage banker, to get started today at (516) 408-7300 or email email@example.com. We look forward to hearing from you!