9 Reasons to Refinance your Loan

Refinancing your mortgage is basically getting a new mortgage on your property to pay off the current loan or to pull cash out on a free and clear property.

Traditional refinancing
When you refinance your existing loan to a new loan with a new interest rate and term (aka a rate and term refinance). You may want to pursue this option to lower your interest rate. If your home currently has a higher interest rate, right now may be an ideal time to consider refinancing. The potential monthly savings can add up significantly over the life of the loan and could translate to tens of thousands of dollars saved just by completing some of our forms and providing some common documents.

Refinance to lower your payment
Refinancing to reduce your mortgage payment could also help you invest more or pay for other upcoming expenses.

Refinance from an adjustable-rate mortgage to a fixed-rate loan
If you presently have an adjustable-rate mortgage that may be adjusting higher in the near future, refinancing now into a fixed-rate loan could be a wise decision. Interest rates are still relatively low, but they are predicted to rise.

Refinance to cash out some equity
It could be a wise financial move depending on your situation. Here is an example. You are considering cashing out some money from the built-up equity to pay for your kid’s college expenses, purchase an investment property, or use it for your business. Depending the value of your home, you can cash out up to a maximum of $3.5 million (#BCL).

Refinance to remove spouse from a divorce (or separation)
Divorces can require a cash-in refinance, in which one former spouse pays off a portion of the outstanding loan balance and the spouse remaining in th home refinances the loan into her or his individual name. Divorces oftentimes cause a refinance to remove the former spouse so they no longer have joint debt.

Refinance to get rid of mortgage insurance
You made a down payment of less than 20 percent, and you've been hit with mortgage insurance payments, aka PMI. Lets' fast forward five to ten years after you got the mortgage, your home’s value as gone up considerably. If the current loan balance is 78 percent or less of the home's appraised value, you should be able to refinance into a new loan that will not require private mortgage insurance. Many borrowers do this if they have an FHA loan which makes mortgage insurance mandatory. The only way to get rid of FHA mortgage insurance payments is to refinance to a conventional loan or to sell your home.

Refinance to consolidate two mortgages
Some homeowners want to combine their first mortgage and their home equity line of credit. If interest rates are rising, it's very likely the line of credit is too. This helps to keep your monthly payment fixed. Your decision will likely be based on how long you will keep the property.

Refinance to an Interest Only Loan
Sometimes borrowers want to have more cash-flow every month and they have built-up equity. With an interest only mortgage feature, they can do just that.

What's the typical cost of a mortgage refinance?
Whenever you get a new mortgage loan, you're going to have fees and closing costs associated with that loan. A mortgage refinance is no different. Fortunately, with us you will not to pay an application fee or processing fee. On conventional adn government loans you can choose to have the fees paid from the loan with a higher interest rates or take a lower rate and pay the fees.

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