Refinance Your Home with Streamline Mortgage
Looking to reduce your interest rates on your mortgage? Do you wish to shorten the term of your mortgage? Refinancing your home loan with Streamline Mortgage might be the right first step for you. Our personalizedRefinance-your-loan concierge service for applying for a mortgage applies for the process of refinancing too. We will take you step by step through out the entire process of refinancing your home mortgage and help get you the plan that is right for you.
Reasons to Refinance a Mortgage
Lower Interest Rates
Refinancing your loan simply means you are paying off an existing loan with a new one and one of the biggest reasons to refinance is a way to lower your interest rate. In some cases by refinancing you could reduce your interest rate by at least 2%. When interest rates are lower, a shorter term for your mortgage could benefit you in the long-term.
Shortening the Loan’s Term
If interest rates are dropping, refinancing your home mortgage to shorten the term of your loan might be a great option without changing the amount of your monthly payments.
Fixed-Rate Mortgages and Adjustable-Rate Mortgages
Another reason to refinance might be to switch from a fixed-rate mortgage to an adjustable-rate mortgage, or visa versa. An amortized fixed-rate loans is the most common type of loan. Amortized means a loan that consists of scheduled periodic payments that are applied to both the principle and interest of a loan. This type of fixed-rate loan means that the interest rates of the installment payment will not chance from the time the loan has been issued.
Fixed-rate mortgages are not always issued as amortized. Non-amortizing loans are also known as balloon payment loans. Lenders would require the interest be calculated annually based on the borrower’s annual interest rate. The lender then would require the borrower to pay a lump balloon sum of the deferred interest.
Adjustable-rate mortgages are also issued with steady installment payments over the life of your loan, but they would offer a fixed-rate interest in the first few years of the life of the loan and then require variable interests rates in the following years. Rather than consistent payment rates, investors would expect varying payment amounts.
Tapping Equity or Consolidating Debt
Some homeowners decide to refinance their loan so they can tap into their home equity. Some owners might decide to tap into the equity of their loan so they can do remodeling on their home to raise its value, do necessary repairs on the home or even pay college tuition for a child. Other times, homeowners wish to take out a new loan on the equity of their mortgage in order to consolidate debt at smaller interest rates than other types of loans offered.
They are three ways to borrow money on the equity of your home loan. One way is by taking out a secondary mortgage whose terms would mirror that of the primary loan. A secondary mortgage would have similar fixed interest rates but would usually be higher than the primary loan. Payments to this loan will similarly be divided between the interest and the principle of the loan.
Next, there is the option to take out a home equity line of credit or HELOC. This is the most flexible option as you will be able to draw on the line of credit when you need it similarly to a credit card. In fact, most HELOCs come with a checkbook or debit card so the borrower can access the funds as quickly as when they need it.
Cash-out refinance is the third of the equity refinance options. With this option, borrowers would refinance their home at a larger amount and then take the difference in cash. Closing costs can be higher with this option rather then the other two mentioned above.
If you wish to refinance your home, whether you would like to lower your interest rate, change the rate or term of your loan, or you wish to consolidate your debt with a secondary loan, Streamline Mortgage would like to help you through the entire process. We will provide the same service we offer to prospective homeowners seeking to apply for a loan for the first time. Here at Streamline Mortgage, we guide you through every step and help you decided on the perfect plan for your financial needs. Contact Streamline Mortgage so we can start the process for applying for a refinancing on your home loan in minutes.