The Big Picture
Refinancing is a tool to help homeowners maximize the financial effectiveness of the equity in their home. Rates remain at near historic lows.
So it’s a great time to act.
There are great reasons to refinance your mortgage loan. They include:
There are costs involved in refinancing. However, these costs are directly related to the interest rate. There are zero cost options and also options with lower rates and higher expenses. Sometimes the fees can be rolled into the new loan to avoid out-of-pocket expenses.
There's a lot to know. Get in touch with a mortgage advisor to learn how we can help you secure a refinance loan that meets your needs.
Refinancing is a tool to help homeowners maximize the financial effectiveness of the equity in their home. Rates remain at near historic lows.
So it’s a great time to act.
There are great reasons to refinance your mortgage loan. They include:
- Lowering your current mortgage payment
- Consolidating Debt
- Paying Off Your Mortgage Faster
- Converting to a Fixed-Rate Mortgage
- Get Cash Out of Your Investment
There are costs involved in refinancing. However, these costs are directly related to the interest rate. There are zero cost options and also options with lower rates and higher expenses. Sometimes the fees can be rolled into the new loan to avoid out-of-pocket expenses.
There's a lot to know. Get in touch with a mortgage advisor to learn how we can help you secure a refinance loan that meets your needs.
Refinance With Purpose
Refinancing shouldn’t be done on a whim. It should be part of a sound financial strategy.
We’d love to explore the many benefits of refinancing with you.
Lower Your Current Mortgage Payment
The interest rate on your mortgage is tied directly to how much you pay on the 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 or the amount of equity in your property has improved. A lower interest rate also may also let you build equity in your home more quickly.
Consolidate Debt
The interest paid on a first mortgage loan is typically tax deductible. The interest on consumer debt is not. So, under certain circumstances, it can be advantageous to consolidate your outstanding consumer debt into a new first mortgage. Consult a tax professional to determine if this strategy is appropriate for you. The other added advantage of consolidating debt is that the overall monthly payment to service the debt will probably go down because you’re amortizing over 30 years at a low interest rate. It will improve your immediate cashflow so you can go live large and create more debt...or save money.
Pay Your Mortgage Faster
By refinancing to convert to a shorter-term mortgage - for example, a 15-year mortgage instead of a 30-year mortgage - you build equity substantially faster. And you typically have lower interest rates. What's more, by paying off the loan sooner, you can significantly reduce your total interest costs. But there's a trade-off. Your monthly payments are usually higher, because you're paying more of the principal each month.
Get Cash Out
Home equity is the dollar-value difference between the balance you owe on your mortgage and the value of your property. When you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment (this is called a cash-out refinancing). You might want to do this if you need cash to make home improvements or to pay for a child’s education. Converting home equity to cash should be carefully considered. Consult with a trusted financial advisor before you take this leap. We can help you find a financial professional in your area.
Convert to a Fixed-Rate Mortgage
If you have an adjustable-rate mortgage, or ARM, your monthly payments will change when the rate adjusts. With this kind of mortgage, your payments could increase or decrease, but monthly payments may not exceed the ARM loan cap.
You may be uncomfortable with the idea that your mortgage payments could unexpectedly go up. In this case, you may want to consider switching to a fixed-rate mortgage. Knowing that they have a steady interest rate and monthly payment gives many people some peace of mind.
Refinancing shouldn’t be done on a whim. It should be part of a sound financial strategy.
We’d love to explore the many benefits of refinancing with you.
Lower Your Current Mortgage Payment
The interest rate on your mortgage is tied directly to how much you pay on the 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 or the amount of equity in your property has improved. A lower interest rate also may also let you build equity in your home more quickly.
Consolidate Debt
The interest paid on a first mortgage loan is typically tax deductible. The interest on consumer debt is not. So, under certain circumstances, it can be advantageous to consolidate your outstanding consumer debt into a new first mortgage. Consult a tax professional to determine if this strategy is appropriate for you. The other added advantage of consolidating debt is that the overall monthly payment to service the debt will probably go down because you’re amortizing over 30 years at a low interest rate. It will improve your immediate cashflow so you can go live large and create more debt...or save money.
Pay Your Mortgage Faster
By refinancing to convert to a shorter-term mortgage - for example, a 15-year mortgage instead of a 30-year mortgage - you build equity substantially faster. And you typically have lower interest rates. What's more, by paying off the loan sooner, you can significantly reduce your total interest costs. But there's a trade-off. Your monthly payments are usually higher, because you're paying more of the principal each month.
Get Cash Out
Home equity is the dollar-value difference between the balance you owe on your mortgage and the value of your property. When you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment (this is called a cash-out refinancing). You might want to do this if you need cash to make home improvements or to pay for a child’s education. Converting home equity to cash should be carefully considered. Consult with a trusted financial advisor before you take this leap. We can help you find a financial professional in your area.
Convert to a Fixed-Rate Mortgage
If you have an adjustable-rate mortgage, or ARM, your monthly payments will change when the rate adjusts. With this kind of mortgage, your payments could increase or decrease, but monthly payments may not exceed the ARM loan cap.
You may be uncomfortable with the idea that your mortgage payments could unexpectedly go up. In this case, you may want to consider switching to a fixed-rate mortgage. Knowing that they have a steady interest rate and monthly payment gives many people some peace of mind.
A walk-through the Refinancing Process
The refinance process is a lot like obtaining a mortgage for a home purchase without a fixed closing date.
Here are the key steps in the process.
1. Contact a trusted mortgage lending professional
Refinancing only makes sense under certain circumstances and the criteria vary with each borrower. One of our mortgage advisors can help you evaluate the pros and cons.
2. Determine if refinancing is a good decision
Because of the costs involved and potential impact on your long-term financial position, refinancing must be carefully considered. Think through the "pay-back period," the length of time required for the savings from the refinanced mortgage to offset its costs.
3. Collect all necessary documentation and submit application
Just like purchasing a new home, documentation of your income, job history, debt, and other factors are involved. You'll need this information in addition to an appraisal of the property.
4. Await the underwriting decision
During the period in which your loan file is being underwritten, you may be asked to provide additional information, or clarification of information already provided. Your Commerce Home Mortgage advisor is your guide and source of up-to-date information on your loan.
5. Close the loan & sign loan documents
At closing you claim the benefits of refinancing and begin a new chapter of your financial life.
The refinance process is a lot like obtaining a mortgage for a home purchase without a fixed closing date.
Here are the key steps in the process.
1. Contact a trusted mortgage lending professional
Refinancing only makes sense under certain circumstances and the criteria vary with each borrower. One of our mortgage advisors can help you evaluate the pros and cons.
2. Determine if refinancing is a good decision
Because of the costs involved and potential impact on your long-term financial position, refinancing must be carefully considered. Think through the "pay-back period," the length of time required for the savings from the refinanced mortgage to offset its costs.
3. Collect all necessary documentation and submit application
Just like purchasing a new home, documentation of your income, job history, debt, and other factors are involved. You'll need this information in addition to an appraisal of the property.
4. Await the underwriting decision
During the period in which your loan file is being underwritten, you may be asked to provide additional information, or clarification of information already provided. Your Commerce Home Mortgage advisor is your guide and source of up-to-date information on your loan.
5. Close the loan & sign loan documents
At closing you claim the benefits of refinancing and begin a new chapter of your financial life.