Is refinancing right for you?
This plan allows you to refinance your mortgage for more than you currently owe. The difference and the equity is converted into cash for the homeowner.
If you currently have a high fixed-rate mortgage and the rates have dropped due to market conditions, then you may want to refinance to a low fixed-rate loan. Also, if you have an ARM, you might consider this option in order to get the security of a fixed rate. Even if your adjustable rate is low now, it is not guaranteed to remain that way; but if you get a low fixed-rate loan, then you lock that low rate in for the life of the loan. This option is a good choice if you are not planning on moving within the next five years.
If your main goal is to quickly build up equity and to pay off your mortgage sooner, then the shorter-term loan is probably your best choice. A lot of times, if you refinance to this type of loan, your monthly payments will be higher, but you will pay substantially less interest and your mortgage will be paid off sooner. Also, you would benefit from a larger tax deduction on interest if you move from a 30-year fixed to a 15-year fixed loan. There are some cases, however, in which you may be able to refinance to a shorter-term loan without raising your monthly payment -if you’ve had your current mortgage for enough years.
If your current monthly payments are higher than is comfortable for your financial situation, then you might want to consider refinancing to a longer-term loan. This will result in a decrease in your monthly payments, since you will have more time to repay the loan. Examining your current mortgage and knowing how you would like to improve it are the first steps you need to take when starting the refinancing process. Once you know this, you can choose the option that will best help you achieve your goals.
Mortgage Banker // NMLS #259721
Molly Dean began her career as a mortgage banker in 2003, shortly after graduating from the University of Kansas. When Molly began her career in mortgage banking, she started in the nonprime market; learning a more out of the box approach at viewing a mortgage application. Through her long career, Molly has never stopped learning. Her knowledge of products and programs allows her the ability to help her borrowers find the program that best matches their individual needs.
Molly understands that when shopping for a mortgage professional, you need an individual and a team with whom you can rely. Molly’s goal is to help you in a fast, friendly, and easy to understand manner. She uses her years of experience and education, to ensure that all of your financial and mortgage needs are successfully met. Molly’s passion is to help her clients achieve the goal of homeownership.
Molly Dean and her team have a combined experience of 50+ years. Molly and her team work endlessly to make the purchase of a home as smooth as possible from start to finish. Molly and her team specialize in Conventional, FHA, VA, USDA, 203K, and Reverse loans.
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