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Refinancing A Mortgage In Washington State

There are a number of good reasons to consider refinancing the mortgage on your home.

You may need to plan for a college education. You may wish to reduce the interest you are paying to credit card companies or auto loan companies. You may want to acquire investment property. Or you may wish to simplify your budget.It is crucial to understand the potential benefits and the potential pitfalls of refinancing.

In general, refinance transactions fall into two categories. The first is called a "Rate and Term" refinance. The second is for some form of debt restructuring. With a Rate and Term Refinance, the borrower seeks either a better interest rate, a different loan length (longer or shorter), or a combination of the two. When interest rates fall, it is a very good idea to check and see if you may benefit from a lower Interest Rate loan. The cost of a new mortgage is often offset by the savings gained by acquiring a reduced Interest Rate. It is imperative that you deal with "real" figures to determine if the cost of a new loan is outweighed by possible savings. This is when a professional loan officer is invaluable to you. A side by side comparison of your options is a service provided by all reputable Mortgage Professionals.

Another scenario occurs when a homeowner reaches the "Adjustable" years of an ARM (Adjustable Rate Mortgage). Many people finance their homes using ARMs in order to take advantage of the lower interest rate offered in the beginning years. But, once that phase ends, the homeowner is at the mercy of the market. It is also common for people with credit challenges to use an ARM to purchase a home and use the fixed rate years to improve their credit situation. Once the credit is improved, they refinance their loan to an attractive Fixed Rate Loan. These are good reasons to consider a refinance. The only difference between a wise decision and a poor decision, is the cost of the new mortgage.

A debt consolidation or debt re-structuring refinance can also take several different forms. If a homeowner is burdened with high credit card interest rates or high interest rate auto loans, they should consider using some of the equity in their home to save money. Let's face it, we all work hard for our money and the thought of spending that hard earned cash on something like interest is enough to keep most of us from sleeping well at night! Once again, a Mortgage Professional can help you sort out the intricacies of refinancing. There are also situations that require unexpected sources of cash. Medical surprises, death and divorce are subjects we all try to avoid but, they are part of life. The anxiety caused by these situations can be greatly reduced once a homeowner realizes that the equity in their home can be used to avert a possible financial disaster. And once again, your Mortgage Professional can help ease you through a difficult time with the minimum amount of additional stress. You have enough to think about.

If you think you may have a need to refinance, please contact your Loan Officer to schedule some time to consider the effects of refinancing. In most cases, we can help you sort through the different possibilities in an hour or so.