| Home Loans in Southern California at |
AL "the Loan Guy" Rivera
Office: (562)402-8400
Direct: (562)587-5284
Fax: (877)402-0402
e-mail: al@altheloanguy.com
Office: (562)402-8400
Direct: (562)587-5284
Fax: (877)402-0402
e-mail: al@altheloanguy.com
Refinance your Home
Refinancing is when you apply for a secured loan in order to pay off another different
loan secured against the same assets, property etc. If this original loan had a fixed
interest rate mortgage which has now declined considerably, then you would like to
avail of a new loan at a more favorable interest rate.
When is Refinancing an Option
Typically home refinancing is done when you have a mortgage on your home and
apply for a second loan to pay off the first one. While making the decision to go for the
home refinancing option, it is important to first determine whether the amount you save
on interests balances out the amount of fees payable during refinancing.
Home Refinancing Benefits
Imagine a scenario where you can have access to extra cash, while simultaneously
lowering your monthly mortgage payment. This dream can become a reality through
mortgage refinancing.
A house is the largest asset you may ever own. Likewise, your mortgage payment may
be the largest expense you'll have in your monthly budget. Wouldn't it be great to use
this asset to reduce your monthly payment and put extra cash in your pocket? When
you refinance your mortgage, you can take advantage of the equity in your home and
enable this to take place.
Lower Refinance Rate, Lower Payments
When you purchased your dream home, the financial environment dictated interest
rates. While certain factors, like your credit rating and the amount of the down
payment that you were able to afford, influenced your interest rate, the single most
important factor was the prevailing rates at that moment. However, interest rates
fluctuate. When the Federal Reserve enters a rate-cutting period, the prevailing rates
may become significantly lower than when you originally purchased your home.
By refinancing your mortgage when interest rates are lower, you can exchange a
higher interest rate for a lower one, which, in turn, will lower your monthly payment.
Shorten the Length of Your Mortgage when Refinancing
Another advantage of home refinancing is that you can shorten the term of your
mortgage. Let's say, for example, that you originally had a 30-year mortgage and have
been paying it for eight years. Thanks to mortgage refinancing, you can switch to a
shorter term of either 10, 15 or 20 years. This can save you thousands of dollars of
interest. Also, if the refinance rate is lower, but you maintain the same monthly
payment, you will build up equity in your home more quickly, because more of your
payment will be going towards principal.
Exchange an Adjustable Rate (ARM) for a Fixed Refinance Rate (FRM)
When interest rates are low, adjustable rate mortgages (ARMs) are the housing
market's darlings. However, as interest rates increase, that adjustable rate may not
look as sweet. It's also possible that you opted for an ARM because your financial
future was less secure, or you weren't sure how long you'd stay in your home. If,
however, you've become financially stable and know that you'll be staying in your
home for several years, it may be beneficial to swap that fluctuating adjustable rate for
a fixed one. You'll have more security knowing that your monthly payment will remain
steady, regardless of the current market environment.
Cash-out refinancing
One way to put more money in your pocket is to tap into the equity you've built in your
home and do a "cash-out" refinancing. In this scenario, you can refinance for an
amount higher than your current principal balance and take the extra funds as cash.
This can provide money for remodeling your home, paying off high-interest rate bills,
or sending your kids to college.
PMI (Private Mortgage Insurance)
If you were unable to make a down payment of 20 percent when you purchased your
home, you may have been required to purchase Private Mortgage Insurance or PMI. If
your house has appreciated since then, and you've steadily paid down your mortgage,
your equity may now be more than 20 percent. If you refinance, you will no longer
need PMI.
In many ways, your house is like a cash cow. If you have discipline and knowledge of
the benefits of refinancing, you can tap into its milk for years to come.
loan secured against the same assets, property etc. If this original loan had a fixed
interest rate mortgage which has now declined considerably, then you would like to
avail of a new loan at a more favorable interest rate.
When is Refinancing an Option
Typically home refinancing is done when you have a mortgage on your home and
apply for a second loan to pay off the first one. While making the decision to go for the
home refinancing option, it is important to first determine whether the amount you save
on interests balances out the amount of fees payable during refinancing.
Home Refinancing Benefits
Imagine a scenario where you can have access to extra cash, while simultaneously
lowering your monthly mortgage payment. This dream can become a reality through
mortgage refinancing.
A house is the largest asset you may ever own. Likewise, your mortgage payment may
be the largest expense you'll have in your monthly budget. Wouldn't it be great to use
this asset to reduce your monthly payment and put extra cash in your pocket? When
you refinance your mortgage, you can take advantage of the equity in your home and
enable this to take place.
Lower Refinance Rate, Lower Payments
When you purchased your dream home, the financial environment dictated interest
rates. While certain factors, like your credit rating and the amount of the down
payment that you were able to afford, influenced your interest rate, the single most
important factor was the prevailing rates at that moment. However, interest rates
fluctuate. When the Federal Reserve enters a rate-cutting period, the prevailing rates
may become significantly lower than when you originally purchased your home.
By refinancing your mortgage when interest rates are lower, you can exchange a
higher interest rate for a lower one, which, in turn, will lower your monthly payment.
Shorten the Length of Your Mortgage when Refinancing
Another advantage of home refinancing is that you can shorten the term of your
mortgage. Let's say, for example, that you originally had a 30-year mortgage and have
been paying it for eight years. Thanks to mortgage refinancing, you can switch to a
shorter term of either 10, 15 or 20 years. This can save you thousands of dollars of
interest. Also, if the refinance rate is lower, but you maintain the same monthly
payment, you will build up equity in your home more quickly, because more of your
payment will be going towards principal.
Exchange an Adjustable Rate (ARM) for a Fixed Refinance Rate (FRM)
When interest rates are low, adjustable rate mortgages (ARMs) are the housing
market's darlings. However, as interest rates increase, that adjustable rate may not
look as sweet. It's also possible that you opted for an ARM because your financial
future was less secure, or you weren't sure how long you'd stay in your home. If,
however, you've become financially stable and know that you'll be staying in your
home for several years, it may be beneficial to swap that fluctuating adjustable rate for
a fixed one. You'll have more security knowing that your monthly payment will remain
steady, regardless of the current market environment.
Cash-out refinancing
One way to put more money in your pocket is to tap into the equity you've built in your
home and do a "cash-out" refinancing. In this scenario, you can refinance for an
amount higher than your current principal balance and take the extra funds as cash.
This can provide money for remodeling your home, paying off high-interest rate bills,
or sending your kids to college.
PMI (Private Mortgage Insurance)
If you were unable to make a down payment of 20 percent when you purchased your
home, you may have been required to purchase Private Mortgage Insurance or PMI. If
your house has appreciated since then, and you've steadily paid down your mortgage,
your equity may now be more than 20 percent. If you refinance, you will no longer
need PMI.
In many ways, your house is like a cash cow. If you have discipline and knowledge of
the benefits of refinancing, you can tap into its milk for years to come.
| Contact Us Today! AL Rivera Direct: (562)587-5284 Email: al@altheloanguy.com |
| AL "the Loan Guy" Rivera 17777 Center Court Dr Suite 275 Cerritos, CA 90703 (562)587-5284 NMLS ID# 260314 |
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