Refinance or refi: to satisfy (a debt) by making another loan on new terms. Is it as easy as it sounds? If your plan is laid out and prepared correctly, yes it is. Your plan must factor in important points such as how long it will take to recoup your upfront investment, overall savings including after-tax savings, tax benefits, the effects it will have on your future net worth, and whether the upfront amount is even worth the trouble depending on how long you plan to keep the property. Refinancing your home should be a strategic plan to increase your overall financial position. Small changes in your mortgage can lead to large savings over time. We will help you determine these savings utilizing very comprehensive tools and analysis.

Rate & Term Refinance: The most common reason is to lower the payment of their mortgage. A Rate & Term Refinance is designed for you to change only the rate and/or loan term. For instance, if your current loan has an interest rate of 7% and the current available interest rate in the market is a 5%, you may perform a Rate & Term Refinance to replace your loan with the more beneficial one. This also goes for changing the term of the loan to either a 30 year, 20 year, or 15 year. These types of loans are usually less restricted as other refinance options such as a cash-out refi. With any refinance option, you are replacing your current loan with a new one. This will reset your loan term back to 30 years or whichever term you decide to choose. For example, you have a 30 year term on your current mortgage and you have been paying on it for 5 years. You are now at the 25 year mark of your amortization for that particular loan. By refinancing it, you will reset that loan back to 30 years. For this reason, I usually recommend reinvesting the newly found savings back into your mortgage. This will cancel the scheduled interest by reducing the principal amount owed which reduces the interest that you were scheduled to pay.

Cash-out Refinance: Another reason or strategy of refinancing that many savvy homeowners use is leveraging a current home’s equity to increase their financial position. Utilizing a Cash-out refinance, homeowners can tap into the equity that they have built (up to a certain amount) to buy rental properties, to start and fund a business venture, or to invest in a safe and secure investment vehicle that will out perform their mortgage.

Separating your equity from your house isn’t always a bad thing, given that you have the proper plan in place. Think about it this way, instead of having one asset perform for you why not have two or more? Your home performs based on the value not the balance. If you take the equity out of your home and invest it in another safe investment, you have now acquired a second investment vehicle that will perform regardless of what your house is doing. Also, when you have tons of equity in your home and if for some reason you can’t make the payments don’t you think your lender will do what it takes to foreclose on you? They know that they can resell the house in the current market for a profit. Now, if you’ve taken the equity out of your house, your lender is going to do what it takes to keep you in the house and paying. They are more likely willing to modify your loan to reduce your payment, change your terms to more favorable and affordable amounts because they know that if it goes to foreclosure they will lose a lot more money.

No matter what your reason is for refinancing you can be sure that we will provide you with an in depth analysis of every option available. My team and I will walk you through each step and we will make sure to fund your loan as smoothly as possible.