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Refinancing Options

01 Refinancing Does refinancing make sense? Compare what you have today with what a refinance would actually change — payment, term, equity and cost. Start a Refinance Review Run the Numbers Your Goal What are you trying to change? Change the Payment Compare your current and proposed monthly payment. → Access Equity Explore cash-out and […]

Refinancing Options

Refinancing

Does refinancing
make sense?

Compare what you have today with what a refinance would actually change — payment, term, equity and cost.

Start a Refinance Review Run the Numbers

Common Refinance Goals

Start with what needs to improve.

The usefulness of a refinance depends on the result you’re trying to achieve.

Change the Payment Compare the proposed payment with what you pay today.
Access Equity Evaluate available proceeds and the resulting loan balance.
Change the Term Consider a different payoff horizon and its effect on payment.
Restructure Debt Compare the proposed mortgage with the obligations being consolidated.

Before You Decide

Compare more than the rate.

A lower rate or payment alone does not tell you whether refinancing is worthwhile.

Monthly Payment What do you pay now, and what would you pay after refinancing?
Transaction Costs What lender, settlement and other applicable costs come with the new loan?
Time Horizon How long do you expect to keep the property or new loan?
Loan Balance & Equity How would the refinance affect what you owe and the equity remaining in the property?
New Loan Terms Compare the rate, term and payment with your existing mortgage.

Next Step

Compare your current mortgage with the alternative.

Start a review or run a payment scenario before deciding.

Start a Refinance Review Run the Numbers

General information only. Refinancing may increase total finance charges over the life of the loan and may not be appropriate for every borrower. Terms, costs and eligibility vary by borrower, property, program and lender. Professional Mortgage & Financing Services · NMLS 389355 · Florida About FAQ

Which refinancing option is best for you?

 

There aren’t quite as many loan programs as there are borrowers, but it seems like it sometimes! We’ll work with you to qualify you for the best loan program to fit your needs. But there are some general considerations you can have in mind in advance.

 

Are you refinancing primarily to lower your rate and monthly payments? Then your best option might be a low fixed-rate loan. Maybe you have a fixed-rate mortgage now with a higher rate, or maybe you have an ARM — adjustable rate mortgage — where the interest rate varies.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 especially a good idea if you don’t think you’ll be moving within the next five years or so.On the other hand, if you do see yourself moving within the next few years, an ARM with a low initial rate might be the best way to lower your monthly payment.

 

Are you refinancing primarily to cash out some home equity? Maybe you want to pay for home improvements, pay your child’s college tuition bill, take your dream vacation, whatever. Then you’ll want to qualify for a loan for more than the balance remaining on your current mortgage.If you’ve had your current mortgage for a number of years and/or have a mortgage whose interest rate is higher, you may be able to do this without increasing your monthly payment.

 

You want to cash out some equity to consolidate other debt? Good idea! If you have the equity in your home to make it work, paying off other debt with higher interest rates than the interest rate on your mortgage — for example, credit cards, home equity loans, car loans, some student loans — means you can save possibly hundreds of dollars a month.

Do you want to build up home equity more quickly, and pay off your mortgage sooner? Consider refinancing with a shorter-term loan, such as a 15-year mortgage.Your payments will be higher than with a longer-term loan, but in exchange, you will pay substantially less interest and will build up equity more quickly.If you have had your current 30-year mortgage for a number of years and the loan balance is relatively low, you may be able to do this without increasing your monthly payment — you may even be able to save! 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, exclusive of taxes, insurance and so on. If your balance today is down to $130,000, you might take out a 15-year mortgage at six percent and have an almost identical monthly payment. This is a great option for people whose main goal is not to save money on their monthly payment but rather want to build up equity and pay off their home more quickly.

 

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