Choosing a Refinancing Program


There are a huge number of refinancing programs available to borrowers. What are your goals for refinancing? Considering in mind the information below will help you narrow your choices.


Reducing Your Monthly Payments


Are getting lower monthly payments and an improved rate your main reasons for refinancing? In that case, a low, fixed rate loan may be your best option. Perhaps you currently have a fixed-rate mortgage with a higher rate, or maybe you have an ARM — adjustable rate mortgage — where the interest rate varies. Even as interest rates rise, a fixed rate mortgage loan will stay at the same, low interest rate, unlike an ARM. If you are not planning a move in the near future (about 5 years), a fixed-rate mortgage can particularly be a wise choice. But if you do plan to sell your home more quickly, you should consider an ARM with a low initial rate in order to achieve lower mortgage payments.


Refinancing to Cash Out


Are you hoping to cash out some of your home equity with your refinance? Perhaps you need to make home improvements, pay your child's college tuition bill, or go on a special family vacation. With this in mind, you will want to apply for a loan higher than the balance remaining of your present mortgage. Then you'll want to find a loan program for a bigger number than the balance remaining on your present mortgage loan. If you've had your existing mortgage loan for quite a while and/or have a mortgage with high interest, you might\could be able to do this without making your mortgage payment higher.


Consolidating Your Debt


Do you want to pull out some of your equity to consolidate additional debt? Excellent idea! If you have the home equity to make it work, paying off other high interest debt (like credit cards, home equity loans, or car loans) means you can possible save several hundred dollars monthly.


Paying it off Sooner


Are you wanting to fatten your equity faster, and pay off your mortgage sooner? You should consider refinancing to a short-term loan, like a 15-year mortgage. You will be paying less interest and increasing your equity faster, although your monthly payments will usually be higher than you have been paying. However, if you have had your existing thirty-year mortgage loan for a number of years and the remaining balance is relatively low, you could be able to do this without increasing your mortgage payment — you might even be able to save! To help you understand your options and the numerous benefits of refinancing.

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Channel Mortgage LLC

Connecting the Dots to Home Ownership

55-25 69th Street 1st Floor
Maspeth, NY 11378-1806