Thinking about refinancing your home? With mortgage rates as low as they are right now, there are so many reasons why more homeowners are choosing to refinance.
For South Florida homeowners, choosing which type of refinancing is the best for you depends on your financial situation. There are three different refinancing options to choose from, and each includes different requirements and outcomes. Let’s take a look.
A rate-and-term refinance loan changes the mortgage rate, the loan term, or even both. These loans are the most common types that people use to refinance their home. For example, a homeowner may want to refinance their 30-year fixed mortgage to a 15-year. They may do this to shorten the term length to pay off the loan faster.
A cash-out refinance loan can also lower the rate or shorten the term loan. So, what’s the difference? A cash-out refinance loan increases the amount of the original loan. Normally, the new loan exceeds the original by 5% or more.
Many homeowners go this route so that they only owe the original amount back to the bank. The remaining is paid at closing, or it is given to creditors. This can help homeowners merge their first and second mortgages.
Cash-out refinance loans are considered high risk for banks. There are strict standards to adhere to before you are approved.
With a cash-in refinance loan, the homeowner brings cash to closing to lower the loan balance and the amount owed. Homeowners use this type of loan to lower their mortgage rate. You gain access to lower rates, and you also cancel mortgage insurance premium when you bring cash to closing.
Start the Free Approval Express Process Today
Not sure where to start when it comes to refinancing? At Choice Mortgage Bank, our team of certified professionals will guide you through the entire process so that no mortgage question or concern goes unanswered.
Contact Emmanuel St. Germain at Choice Mortgage Bank today at (561) 362-8204, and we’ll help get you started on our free approval process. We look forward to working with you!