Should I Refinance?

Real estate values appreciate over time and the mortgage from your initial purchase may not necessarily serve your needs the way it did when you first purchased your home. Refinancing your mortgage can be used as a tool and you can use the value increase of your home to optimize your cash flow, achieve life goals, and overcome life’s hurdles. There are two refinance types: rate and term and cash out.

Rate and term refinance replaces your existing mortgage with a new one that either lowers your interest rate and/or changes the term (remaining months) of your mortgage. Example; You have a 5% interest rate and 22 years left on your mortgage. Lower your interest rate to current (3.25%) interest rate and change the term to suit your needs. Shorten the term so your home is paid off sooner, or, lengthen the term so you reduce your monthly payment even further.

Cash out refinance replaces your existing mortgage with a new one that provides you with cash from your home’s equity that can be used to eliminate retail debt, make major home improvements, pay for college, make a down payment on a vacation home or a down payment on your next home. Cash out refinance also provides the opportunity to change your remaining term.

For more information on refinancing contact us today at (808) 333-4341. Begin your application here.

Home owner wanted to consolidate 20 lines of credit and plan their retirement mortgage-free. Cash out refinance paid off all credit lines. New term ensured their home would be paid off at retirement age. New monthly payment was lower as well.

Home owner purchased their home with a 4.875% interest rate 2 years ago. Rate and term refinance resulted in a 3.25% interest rate and $700+ monthly savings. Some home owners will continue paying the original amount but applying the new difference toward principle.

 

Big Island Mortgages by Doug Mallardi

(808) 333-4341 doug@bigislandmortgages.com

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