GUIDE TO REFINANCING
ARE YOU READY TO REFINANCE YOUR MORTGAGE
Refinancing is the process of obtaining a new mortgage in an effort to reduce monthly payments, lower your interest rates, take cash out of your home for large purchases, or change mortgage companies. Most people refinance when they have equity on their home, which is the difference between the amount owed to the mortgage company and the value of the home.
With a refinance, you pay off your current loan with a new loan and restructure the mortgage to fit your needs. You could also save a considerable amount of money over the life of your loan and improve your overall financial outlook. Our mortgage planners will discuss your financial goals to analyze the best loan product to meet your refinancing needs.
Refinancing with Fairway
At Fairway Independent Mortgage Corporation, our mortgage planners make the process of refinancing easier than you’ve ever thought possible. They will take the time to discuss your financial objectives and answer all of your questions before showing you the best loan for your future plans. The application process is smooth and we keep you up to date with milestone emails from the moment the application is accepted through the closing.
Our priority is to begin the refinancing process by getting to know you better and listen to your needs. Then we identify the loan options available, look at the potential savings versus the costs. We then sit down with you to go over the best solutions for your needs. This last step of laying out the solutions before you is a very important part of the process and the staff at Fairway prides itself on the transparency of providing you with all of the information and options to make an informed decision for what best fits your needs and budget.
Benefits to Refinancing
- Shorten your loan’s term to save even more money
- Refinance to a lower interest rate which might also lower your monthly payments
- Convert your adjustable-rate mortgage (ARM) to a fixed-rate loan which will keep your payments safe from possible interest rate increases
- Combine a first and second lien to a single loan for simplicity and savings
- Consolidate debt from higher interest rate credit cards or subordinate financed loans into one loan which may result in lower monthly payments
- Turn your home equity into cash
MORE ABOUT REFINANCING YOUR LOAN
To learn more about refinancing and discover if this is the best option for you, please see the frequently asked questions below.
Five common reasons people refinance their homes are:
- You can reduce the interest rate (and, therefore, interest costs) by financing at a lower rate. This is a primary reason for refinancing. Depending on the circumstances, you can save a lot of money!
- You can extend the repayment time; thus, reducing the monthly mortgage payment. This increases your cash flow. That money can then be used to pay off high-interest debt (e.g., credit cards, school loans).
- Reduce your payment by changing from a variable-rate to a fixed-rate loan. This frees you from the sometimes expensive interest rate/payment fluctuations that can occur in a volatile real estate market.
- Rather than extending the term, you may decide to shorten the term and reduce the interest rate – for example, moving to a 15-year fixed rate. This may not increase your payment much and will still allow you to pay off your house years sooner.
- Finally, if you are a homeowner who understands investing money, you can refinance in order to raise cash for investments, improve overall cash flow, etc.
A cash-out refinance allows you to take cash out of your home equity by replacing your current mortgage with a new loan that is more than the amount owed. This option can help you pay for major expenses like college tuition, debt or home improvements.
*Appraised property value may affect loan amount.
A Cash-In Refinance is one where the homeowner will bring money to the closing in order to lower the Loan-to-Value (LTV) ratio. With a lower Loan-to-Value, a Charlotte homeowner will get a lower interest rate, lower or no PMI, and will not have a second mortgage.
Since most savings accounts, CD’s and Money Market accounts only pay about 0% to 1% interest, it doesn’t make much sense to keep more than a good emergency fund inside one of these accounts. After that, a Cash-In Refinance can have the same effect as earning 7-12% interest on your savings.
With today’s interest rates on both mortgages and savings accounts, a Cash-In Refinance can be a smart move to allow a homeowner to get rid of PMI, or pay off a higher interest rate second mortgage, or to simply get a lower mortgage payment.
Fairway Independent Mortgage Corporation loan experts work with refinancing all types of loans, from fixed-rate and adjustable-rate mortgages to FHA loans. Contact us today for more information!
Contact one of our loan experts today! At Fairway, we will walk you through every step of the refinancing process to make sure the outcome is best for you.