Which refinancing option is best for you?

We'll work with you to qualify you for the best loan program to fit your financial needs and goals. But there are some general considerations you can have in mind in advance.

Are you refinancing primarily to lower your rate and monthly payments? Then your best option might be a low fixed-rate loan. Maybe you have a fixed-rate mortgage now with a higher rate, or maybe you have an ARM -- adjustable rate mortgage -- where the interest rate varies. Even if it's low now, unlike your ARM, when you qualify for a fixed-rate mortgage, you lock that low rate in for the life of your loan. This is especially a good idea if you don't think you'll be moving within the next five years or so. On the other hand, if you do see yourself moving within the next few years, an ARM with a low initial rate might be the best way to lower your monthly payment.

Are you refinancing primarily to cash out some home equity? Maybe you want to pay for home improvements, have funds to open your own business, pay your child's college tuition bill, or invest your equity in stocks and bonds or with a financial planner. Then you'll want to qualify for a loan for more than the balance remaining on your current mortgage. If you've had your current mortgage for a number of years and/or have a high interest rate, you may be able to do this without increasing your monthly payment.

You want to cash out some equity to consolidate other debt? Good idea! If you have the equity in your home to make it work, paying off other debt with higher interest rates than the interest rate on your mortgage -- for example, credit cards, home equity loans, car loans, some student loans -- means you can possibly save hundreds of dollars a month.  Remember that once you use your home's equity to accomplish your financial goals, all or a portion may be "Tax Deductible".  (Contact your CPA or Financial Planner for qualifications)

Do you want to build up home equity more quickly, and pay off your mortgage sooner? Consider refinancing with a shorter-term loan, such as a 15-year mortgage. Your payments will be higher than with a longer-term loan, but in exchange, you will pay substantially less interest and will build up equity more quickly. If you have had your current 30-year mortgage for a number of years and the loan balance is relatively low, you may be able to do this without increasing your monthly payment -- you may even be able to save! For example, let's say your initial mortgage was $150,000 and your had a 30-year term at 8.00%. Your monthly mortgage payment is $1,100.65, exclusive of taxes and insurance (escrows). If your balance today has been reduced to $130,000, you might take out a 15-year mortgage at 6.00% and have an almost identical monthly payment ($1,097.01). This is a great option for people whose main goal is not to save money on their monthly payment but rather wish to build up equity and pay off their home more quickly.