You have a mortgage now, but want to refinance it. Fortunately, with Colorado Springs mortgage lenders, you have many options. Whether you want to lower your interest rate, change your term, or take money out of your home’s equity, there are options.
Here’s what lenders offer.
Rate and Term Refinance
If you have a rate higher than is currently offered, you can refinance your current mortgage with a rate/term refinance. The program is simple. You refinance only the amount of mortgage currently outstanding and get today’s current rates.
In our low-interest-rate environment, it’s easy to save money on your mortgage. Borrowers use this option to save money each month. Some even use it to pay their mortgage down faster. They make the same mortgage payment they’re used to each month, but apply the ‘extra’ funds to the principal, paying the mortgage down faster.
If you earned equity in your home, you may have the money you can tap into. A cash-out refinance is for a larger amount. It pays off your existing mortgage and gives you the difference in cash. You can use your equity however you want, but typically borrowers use it for home renovations, consolidate debt, pay medical bills, or even pay for college.
Most Colorado Springs mortgage lenders allow homeowners to tap into up to 80% of their home’s value. For example, if your home is worth $200,000, you could borrow up to $160,000. The amount of cash you receive depends on the amount of your first mortgage that must be paid off.
If you currently have an FHA or VA loan, you may be eligible for a streamlined refinance. This refinance is similar to a rate/term refinance because you refinance only the outstanding loan amount, but it has a few different features.
You don’t have to verify your credit score, income, or even home value. All that’s required is a timely mortgage payment history and to prove you benefit from refinancing. For example, if you’re able to secure a lower interest rate, saving you $100 a month, you benefit from the refinance.
The FHA and VA just want to make sure all borrowers benefit from refinancing since there are closing costs involved, but since it’s a streamlined refinance, even the costs are lower.
Before you apply to refinance with one of the Colorado Springs mortgage lenders, decide what you want out of a refinance. Are you looking to tap into your home’s equity or do you want to change your loan’s rate or term?
When you look at your options, find a lender that offers not only the best rate and terms, but that will also walk you through the process. Refinancing your mortgage is just as important as your purchase mortgage. You have a lot of decisions to make and terms to understand.
If you’re ready to refinance or to look at your options, contact me today! I’ll walk you through your options and help you see which loan option works the best for you.