Refinance Loans

A refinance loan is a new loan that pays off your old loan(s). Refinancing your current home loan may be a good way to:

  • Lower your interest rate. This may be possible because of market conditions or because your credit score has improved.
  • Adjust the length of your mortgage. The term can either be increased or decreased. If you decrease the term of your mortgage, your monthly payment may increase, but your interest rate will likely decrease and you will pay off your loan sooner.
  • Change from an adjustable-rate mortgage to a fixed-rate mortgage. This could be advantageous if you think interest rates will increase in the future.
  • Get an ARM with better terms. The new loan might start with a lower interest rate, or have smaller interest rate adjustments or lower payment caps.
  • Get cash out from the equity in your home. When you refinance for an amount greater than the amount you owe on your home, you can receive the difference in a cash payment for certain eligible expenditures.  These include making home improvements, college funding, debt consolidation, and so on.

Reasons Not to Refinance:

  • You have had your mortgage for a long enough time. Refinancing will increase the amount of money you will pay in interest, because you pay the highest amount of interest in the early years of a loan. We can help you decide what best suits your situation.
  • Your current mortgage has a prepayment penalty (many do not). Compare the cost of the penalty to the savings you expect to gain from refinancing.
  • You plan to move in the next few years.

Are you eligible to refinance? The loan application, processing, underwriting and closing for a refinance are very similar to those of the initial loan. Also, the loan amount you request will be compared to the value of your home. We will need to order a new appraisal to determine the current value of your home.

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