Refinance Options
Refinancing an Existing Michigan Mortgage
When you refinance, you are taking out a new mortgage that is paying off and replacing your existing home loan. The options available for your specific situation will vary based on what you personally qualify for and each individual lender's underwriting guidelines, so make sure you discuss your situation with a mortgage professional. The options below are provided as examples.
Term: The new loan can have any term (length in years or months) you wish, regardless of the amount of time remaining on your current mortgage. So you may wish to shorten the term and pay the new home loan off faster, or extend the term out to reduce your monthly payments.
Loan Amount: The new loan amount can also change to accomplish your goals. For example, you could roll the closing costs into the new loan so the refinance doesn't cost you any money out-of-pocket at closing. Or perhaps you have some needed home improvements coming up, debt to consolidate or other expenditures and wish to borrower more than your current mortgage that you're refinancing. Maybe you're approaching retirement and wish to pay down the balance some at closing to make the payments more manageable on your future fixed income.
Interest Rate: Typically and ideally, the refinance would result in a lower rate on the new mortgage, however there are situations when an increase in rate may still make sense for your overall financial picture. For example, if you were consolidating credit card debt with higher interest, a slight increase in the rate on your home loan may still be a sound financial decision.
The term, loan amount and interest rate mentioned above are the main "parts" of the mortgage you would be adjusting when you refinance. But what are some common reasons for a refinance?
When interest rates go down, it creates the most common reason to refinance and that is simply to lower the rate you're paying on your mortgage. Other common reasons include: removing one of the existing borrowers from the loan, taking out equity for home renovations or any other need, consolidating debt at a lower rate, and shortening the term to pay the home loan off in less time.
Contact us today to discuss your needs and goals and we'll help walk you through the many different options available. Parker Mortgage Group is a licensed mortgage broker with access to many banks and lenders to provide you with the best mortgage to suit both your short and long-term needs.
