There are many reasons you might consider refinancing your existing mortgage. It’s important to make your home equity work for you and possibly reduce your monthly mortgage payments.
The following are a few things to consider when contemplating whether or not a refinance is right for you:
Lower Interest Rates- Have interest rates dropped since you purchased your home?
You have a higher credit score now – Having a better credit score can help you qualify for better mortgage products.
You no longer require Private Mortgage Insurance (PMI) – Once your loan to value is less than 80% you may be eligible to discontinue PMI on your existing mortgage or qualify to refinance to a mortgage type that does not require it.
Do you want to change the terms of repayment? – You may want to switch from an Adjustable Rate Mortgage (ARM) to a fixed rate mortgage. Or, you may want to switch the terms of your repayment. For example, you might choose to switch from a 30 year to a 15 year repayment term
Do you need cash out for a major expense?
What is a Cash-Out Refinance?
When you need cash for an unexpected or large expense, a cash-out refinance lets you borrow against the equity you have in your home. Borrowers will often refinance for large purchases and expenses like medical bills and college tuition. Sometimes a borrower may want cash for debt consolidation or home improvements.
A cash-out refinance could be a perfect solution for you. However, lending guidelines for cash-out refinances can be strict and qualifying could knock some homeowners out of the running. If you are like many borrowers, you may be unsure this type of loan is the best financial strategy for your individual situation. George Mason Mortgage has a variety of exclusive mortgage refinance programs that meet a number of needs. In today’s lending marketplace, alternatives to cash-out refinance might be a better fit. Ask your George Mason Mortgage loan officer whether a home equity line of credit (HELOC), a home equity loan (HELOAN), a 203K or HomeStyle renovation loan or a cash-out refinance might be the right choice for your individual situation.