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Which refinancing option is best for you?

While, there are many reasons people refinance their home, there are two main categories those reasons fall under.

1.  Rate and/or Term reduction -  this type of refinance is used to either reduce your interest rate, reduce your monthly payment, or reduce the amount of time it will take to pay off your home (the term). Lowering your rate AND term does not always mean a lower payment; often it's quite the opposite. However, the long-term savings can be SUBSTANTIAL! 

Do you want to build up home equtiy more quickly and pay off your mortgage sooner? Condiser refinancing with a shorter-term loan such as a 15-year mortage! Your payments will be higher than with a longer-term loan, but in exchange, you will pay substantially less interest and will build equity more quickly. If you have had yoru current 30-year mortgage for a number of years adn the loan balance is relatively low, you may be able to do this without increasing your monthly payment - you may eve be able to save! For example, let's say years ago you took out a $150,000, 30-year mortgage at 8% interes rate. Your payment is about $1,100 per month, exclusive of taxes, insurance and so on. If your balance today is down to $130,000, you might take our a 15-year mortage at 6% and have an almost identical monthly payment. This is a great option for people whose main goal is not to save money on their monthly payment, but to build equity and pay their home off more quickly!

We provide a comprehensive analysis to show you how much your potential savings will be! All we need to get started are a few details of your current mortgage - current interest rate, your most recent mortgage statment, current annual insurance premium and when it's due, and when you purchased your home or last refinanced your home.  Or, you can go straight to the application clicking the image below!

2.  Cashout Refinance - as the name implies, in this type of refinance you are withdrawing part of the equity in your home. It is important to note here that taking our equity from your home will increase what you currently owe on your home. This means your monthly payment will likely be higher. However, there are strategic ways you can leverage the equity in your home to your advantage! Here are just a few of  the reasons you may want to consider a Cashout Refinance:

  • Consolidate Debt - Let's use a hypothetical example - Say that your monthly non-mortgage debt payments are $1,000 per month. Paying off those debts using the equity in your home would hypothetically raise your mortgage payment by $200. However, you would no longer have the $1,000 output every month, therefore saving you $750 per month in non-mortgage debt payments! This new cash flow could be used to pay down your mortgage faster,  it can be used to invest in your retirement plan, or it could be used to build your rainy-day savings account. The ideas are limitless!!
  • Investment - many savvy investors use the equity in their properties to acquire more properties. You may not think you have enough experience or funds to become a real estate investor, but you would be suprised to learn how easy it is!
  • Home Improvements - need to repair your roof because insurance premiums have risen? Does your kitchen require a much-needed remodeling? Or maybe you can finally build that outdoor kitchen for entertaining guests! Using the equity in your home is an quick and easy way to finance a number of home improvement projects.

Whaever your needs are or motivationmay be, Lincoln Lending Group is always available to serve you and your family. Call us today and let answer your questions and let us know how we can help you.