Refinance
Saving money is important in succeeding in today’s economy and refinancing your home loan is one way you can lower your monthly payments. A careful analysis combined with expert advice will ensure that you make the right decision.
The costs associated with refinancing are similar to those of obtaining an original home loan and include legal fees, application fees, settlement costs, and other related fees. When refinancing, additional fees can arise and they can include a fee charged if you paid off your original mortgage early, the points associated with the refinance, and the home loan interest rate.
Typically the cost runs between three and six percent of the total amount of the home loan. Therefore, even if your rate change is less than one percentage point, you may be able to save some money by refinancing.
Cash-Out Refinance
New Direction Capital offers refinance packages where you refinance for more than the balance remaining on your old home loan. In the mortgage world this is called a Cash-Out Refinance.
The economy has caused interest rates to drop recently which may allow you to refinance your home without increasing your monthly payments. The extra cash that results from refinancing can be used for many purposes; one of the smartest ways to use these funds is to pay off any loans with higher interest rates.
If you are in a positive position regarding debt, you may be interested in using the money for a more enjoyable purpose, such as building an addition on to your home or having additional funds to pay for higher education. However you decide to use the funds, we can help you through the process.
Converting Your ARM to a Fixed Rate
Home owners have two rate options when refinancing their home loan, fixed rate mortgages and adjustable rate mortgages, (ARMs). ARMs are attractive in today’s economy because they offer very low introductory rates but due to financial market instability, these rates can jump quickly and homeowners may find themselves paying more than they had bargained for.
Adjustable rate mortgages are not always unpredictable though. Homeowners who know the length of time they plan to stay in their home may secure an ARM for that specific amount of time, which will save the homeowner money and avoid rising payments.
Contact New Direction Capital for more information.