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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! Our Loan Specialists are able to analyze your unique situation to help determine which programs best suit you and your financial goals.

There are some general considerations you can have in mind when you speak to us about a loan:

How long do you intend to keep your home? How long will you keep the new loan? Will there be a job transfer or a need to refinance in the future (for a child's education for example) that result in keeping the loan only a specific number of years? What is your tolerance for risk? Adjustable rate loans have more risk but there is typically a significant reward in terms of interest rate savings in the near term. These factors all need to be considered when choosing a loan product.

There are many events that can cause someone to consider a refinance. The classic situation, of course, is simply to save money. In a declining interest rate market there can be opportunities to substantially lower your payments. However, often people refinance for other reasons as well--including needing cash out for home improvements or other needs such as cash for consolidating other debts, or wanting to use a loan product (say an interest only loan for example) to lower monthly payments but not necessarily lower the rate. In some cases we have seen borrowers who want to accelerate paying down their loans so that by a certain age (retirement for example) they will have retired their debt. Since a shorter term loan typically has a lower rate, refinancing and adding additional principal payments can be just the right combination to meet your goal.

One of the most common reasons for refinancing currently is that many borrowers have adjustable rate mortgages. While initially at a fixed rate for some years (typically 5 or 7), these loans are coming into the period where they begin adjusting. The rates on these loans are typically higher during the adjustable period than they were at the initial fixed rate. Our Loan Specialists might suggest another adjustable rate mortgage, or possibly a fixed rate loan using a temporary buy down option so that your payments do not move up dramatically. Again, depending upon your anticipated holding period and tolerance for risk, we can help find a loan solution that meets your unique needs.