Choice Lending Corp Refinance Guide
Have interest rates fallen? Or do you expect them to go up? Has your credit score improved enough so that you might be eligible for a lower-rate mortgage? Would you like to switch into a different type of mortgage?
The answers to these questions will influence your decision to refinance your mortgage. But before deciding, you need to understand all that refinancing involves. Your home may be your most valuable financial asset, so you want to be careful when choosing a lender or broker and specific mortgage terms. When you call one of Choice Lending Corps trained and qualified professional loan officers you will receive an honest straightforward evaluation of your mortgage needs.
Why consider refinancing?
Lowering your interest rate
The interest rate on your mortgage is tied directly to how much you pay on your mortgage each month–lower rates usually mean lower payments. You may be able to get a lower rate because of changes in the market conditions or because your credit score has improved. A lower interest rate also may allow you to build equity in your home more quickly.
Changing from an adjustable-rate mortgage to a fixed-rate mortgage
If you have an adjustable-rate mortgage, or ARM, your monthly payments will change as the interest rate changes. With this kind of mortgage, your payments could increase or decrease.
You may find yourself uncomfortable with the prospect that your mortgage payments could go up. In this case, you may want to consider switching to a fixed-rate mortgage to give yourself some peace of mind by having a steady interest rate and monthly payment. You also might prefer a fixed-rate mortgage if you think interest rates will be increasing in the future.
Getting cash out from the equity built up in your home
Home equity is the dollar-value difference between the balance you owe on your mortgage and the value of your property. When you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment (this is called a cash-out refinancing). You might choose to do this, for example, if you need cash to make home improvements or pay for a child’s education.
Are you eligible to refinance?
Determining your eligibility for refinancing is similar to the approval process that you went through with your first mortgage. Your Choice Professional will consider your income and assets, credit score, other debts, the current value of the property, and the amount you want to borrow.
We will look at the amount of the loan you request and the value of your home, determined from an appraisal. The loan-to-value (LTV) ratio will be one of the factors to determine what the loan rate and terms will be.
If you have an FHA loan currently you may be eligible for a Streamline Refinance. This is a limited documentation loan which doesn’t require an appraisal or income qualifying.
You’ve probably already heard of the HARP program. If you have a Conventional loan you may be eligible for a refinance even if owe more on your home than what it’s worth!
Choice Lending Corp has many more refinance options available than space will allow. Take the time to fill out our handy contact form below or better yet give us a call at any one of our convenient branches.
