Refinancing a mortgage can give homeowners the ability to afford projects that might ordinarily be too expensive for their budget projects such as remodeling a home, paying off expensive credit cards, paying college tuition for the kids, or paying off special assessments for their homeowner's association.
Whether you want to reduce your monthly payments or take advantage of favorable interest rates, at Kappes Miller Association Funding & Mortgage Group, LLC, we will match the benefits of all the different loan types to the goals you have for refinancing.
Lower Monthly Payments
Kappes Miller Association Funding & Mortgage Group can analyze your financial situation to help you decide if lowering your monthly payments will beneficial in the long run. For example, you are planning on owning your current home for a short period of time, in many cases it makes sense to refinance with no closing fees or "out of pocket" expenses. These fees are made up with higher interest rates over the life of the loan. Because these higher rates will only be paid for a short period of time, the total interest paid is less than what would have been paid out of pocket at closing, which saves you money.
If you are planning on owning your home for a long period of time, Kappes Miller Association Funding & Mortgage Group can help you calculate break-even points to see if lowering your monthly payments is worth the cost. No matter what your situation, there are many ways that Kappes Miller Association Funding & Mortgage Group can save you money by refinancing your home.
Relax with the security of a fixed rate loan
For some, fluctuating interest rates and possible changes in payments may be a little unsettling, particularly for those who might have trouble absorbing added expenses if interest rates were to rise. Kappes Miller Association Funding & Mortgage Group can help you secure a fixed rate loan that avoids changes in interest rates.
Depending upon your situation, many options are available with fixed rate loans. If you plan on staying in your home for a short period of time, securing a short term fixed rate loan that switches to an Adjustable Rate Mortgage (ARM) after a set number of years might make sense. Typically, the shorter your initial fixed rate period is, the lower the interest rate becomes. And by the time the loan converts to an ARM, you will have already moved into a new home.
Switch to an ARM for short term savings
If your goal is to immediately save money on monthly payments, switching to an ARM can offer substantial savings. Depending on current interest rates, the savings can be considerable, particularly if you secure an ARM with no "out of pocket" costs. If you're planning on staying in your home for a set number of years, an ARM could save you significant money (since these fees are made up with slightly higher interest rates over the life of the loan).
Take out cash from your home's equity
As you make payments on your home, you are building up the equity you have in your home. One way to help pay for large expenses, such as remodeling, is to borrow money from your home's equity through refinancing. Owners can typically borrow up to 75% of the appraised value of the home.
Kappes Miller Association Funding & Mortgage Group can even show you how combining debts into your home loan can save money on taxes each year. If you borrow money from your home's equity, you can use that money to pay off credit cards or car loans, which have non-deductible interest costs. Since home loan interest is deductible, by eliminating non-deductible interest costs and simply placing all debts into your home loan, the only interest payments you have would be deductible. Consult your tax advisor for specific advice on your financial situation.
By understanding your current situation, your plans for the future, and your financial goals, Kappes Miller Association Funding & Mortgage Group can show you how to take advantage of different loan types and help you achieve your goals.