Refinance Your Mortgage and Take Cash Out

 

Choice Lending Corp San Diego Refinance Guide

Why refinance with Choice Lending Corp San Diego?

• Interest rates have fallen
• Convert your variable rate to a fixed rate mortgage
• Your credit score improved enough so that you might be eligible for a lower-rate mortgage
• Your home has appreciated enough to drop your PMI
• Switch into a different type of mortgage
• Adjust your loan term
• Access additional money for whatever purpose

Before deciding to refinance, you need to understand all that refinancing involves. Your home is your most valuable financial asset, and we understand that. When you call one of Choice Lending Corp San Diego’s trained and qualified loan officers you will receive an honest straightforward evaluation of your mortgage needs.

If you’re not sure about your home’s value, we can complete a free search of comparable homes that have sold in your neighborhood to assist in determining an estimate of your home’s value.

 

Why consider refinancing?

Get cash out from the equity built up in your home
Home equity is the dollar-value difference between the balance you owe on your mortgage and the value of your property. And in San Diego, with our consistent home value increases, this can equate to quite an amount of extra money. When you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment, referred to as a cash-out refinance. With cash out, you can update your kitchen or bathroom for added value to your home. You may also use the extra cash to complete an addition or spruce up your outdoor landscaping. Other uses can be anything from starting a college fund for your children to using the extra money as a down payment on a second home.

Basically, get your home equity working for you…in any way you choose.

Lowering your interest rate and/or term
The interest rate on your mortgage is tied directly to how much you pay on your mortgage each month–lower rates usually mean lower payments. You may be able to get a lower rate because of changes in market conditions or because your credit score has improved.

In addition to 30 year loans, Choice Lending Corp San Diego also offers lower term loans such as 10, 15, 20 and 25 year terms. You may think that a 15 year loan will double your payment, but this is not the case.  Because interest rates on shorter term loans are historically lower and your principal balance decreases faster, you may see an increase of only a few hundred dollars in your payment but your mortgage will pay off in half the time!

Changing from an adjustable-rate mortgage to a fixed-rate mortgage
If you have an adjustable-rate mortgage, or ARM, your monthly payments will change as the interest rate changes. With this kind of mortgage, your payments could increase or decrease, creating some financial uncertainty.

You may find yourself uncomfortable with the prospect that your mortgage payments could go up. In this case, you may want to consider switching to a fixed-rate mortgage to give yourself some peace of mind by having a set interest rate and monthly payment. You also might prefer a fixed-rate mortgage if you think interest rates will be increasing in the future.

Refinance and drop expensive and wasteful PMI

For many homeowners who purchased their homes with less than 20% down, private mortgage insurance (PMI) is a costly part of their monthly payment.  Depending on the type of loan and the down payment percentage, monthly PMI could be adding hundreds of dollars to a monthly mortgage payment.

With home values throughout San Diego County on the rise, it’s a great time to think about refinancing and dropping that expensive, and often wasteful, PMI from your payment. In addition, with rates still at record lows, refinancing could drop your mortgage payment substantially and get rid of that PMI.

Are you eligible to refinance?
Determining your eligibility for refinancing is similar to the approval process that you went through with your original mortgage. Your Choice Lending Corp San Diego loan officer will consider your income and assets, your credit score, your other debts, the current value of your property, and the amount you want to borrow.

The loan-to-value (LTV) ratio will be one of the factors to determine what the loan rate and terms will be. This is determined by the amount of the loan needed and the value of your home, which is based on an official appraisal.

If you currently have an FHA, VA or USDA loan, you may be eligible for a Streamline Refinance to lower your payment. These are limited documentation loans that don’t require an appraisal or income qualifying (USDA borrowers cannot exceed current income maximums for their household).

You’ve probably already heard of the HARP program. If you have a Conventional loan you may be eligible for a refinance even if you owe more on your home than what it’s worth.

Choice Lending Corp San Diego has many more refinance options available. We know you’ll have more questions so please give us a call or fill out our handy “Contact Us” message box.