Refinance

In this economy people are looking to spend less and save more. This is a great time to refinance and take advantage of low interest rates! We make it easy for you to start saving money so you have more money in your pocket. In many cases, you can close your new loan with little or no out of pocket expenses.

There are a variety of reasons you may choose to refinance your home. Here are some of the most common reasons:

Refinancing to Lower Monthly Payments

There are two ways refinancing can allow you to reduce your monthly payment. One way is to refinance at a lower interest rate. A rate that is a percentage lower than what your current loan is can make a change in your monthly payment. It is important however, to evaluate application, closing and other costs to determine your breakeven point (or how long you will have to make payments at the lower rate before the cost of refinancing has paid off) and if/when refinancing makes sense. Use this calculator to get an idea where your breakeven point might be.

Another way to lower your monthly payments is to change the term of your loan. Changing the term from 15 years to 30 years, for example, would yield a lower monthly payment. Note however, refinancing to a longer term may mean paying more in interest over the life of the loan.

Refinancing to Save on Interest

Obviously, a lower mortgage rate means you won’t pay as much interest for any given loan, but another way to save on interest is by reducing the term of your loan. Refinancing to change the term from 30 years to 15 years can save a significant amount in interest over the life of the loan. Note however, your monthly payments could increase if you choose a shorter term loan.

Refinancing to Convert an Adjustable Rate Mortgage (ARM) to a Fixed-Rate or Vise Versa

If interest rates are favorable, you may want to consider converting an adjustable rate mortgage (ARM) to a fixed rate mortgage before the ARM term ends and the rate becomes fixed. Or, you might consider refinancing to another ARM if you feel interest rates are in your favor to do so.

If you are planning on staying in your home for only 5-7 years, you might want to consider refinancing to an ARM. Interest rates on adjustable rate mortgages are generally lower than current fixed-rate mortgages, thereby making monthly payments lower. Since you won’t be in the same home when the ARM converts to a fixed rate, you won’t have to worry about what the fixed rate will be.

Refinancing to get cash or Pay off Debt

Known as “cash out refinance,” you can refinance to get a loan that is greater than the amount you on your current mortgage, based upon the equity in your home. This can help you pay for any large expenses you see coming in the near future, such as home improvements or college tuition, or help you pay off credit card charges or other debt that has a high interest rate. Not only can you save money with a lower interest rate, you can get a tax benefit – interest paid in mortgages is most likely tax deductable. Be sure to check with a tax advisor or attorney before you begin. Apply for Debt Consolidation/Cash Out Refinance loan.

Consolidation/Cash Out Refinance loan.

·         Determine if you should consolidate your loans and credit card debt

·         Contact a Gateway Funding mortgage advisor today for a complimentary and easy mortgage evaluation.

Let us review this together and see if it makes sense for you. 

There are many options that may benefit you.