Home Refinance Options

by Kevin O'Connor Helping Homeowners Achieve Their Dreams

Refinancing Your Home Mortgage:

Refinancing your current mortgage is a great way to lower your interest rate or obtain cash out to remodel a home. Some home owners may need to refinance their mortgage so that they can pay medical and/or educational bills. Whatever the reason is you'll want to get the best possible rate at great terms. So far mortgage rates in 2019 are lower than they were in 2018 (at least the second half of 2018). Fixed rate mortgage like the 30 year fixed or the 15 year fixed rate term have improved a lot since October/November 2018 and mortgage professionals around the country hope this trend continued well into 2019.

Your Fixed Rate Refinance Options:

If you are looking to refinance your current mortgage into a fixed rate mortgage here are the three most popular fixed rate terms:

30 year fixed rate mortgage: Your rate and your payment is fixed for 360 months (30 years). Most 30 year fixed mortgages do not have a pre-payment penalty however please confirm this with your Loan Officer.
20 year fixed rate mortgage: Your interest rate and your monthly payment are fixed for 240 months (20 years). Like the 30 year fixed mortgage; most 20 year fixed terms do not come with a pre-payment penalty.
15 year fixed rate mortgage: This is actually the second most popular fixed rate term since you're able to pay off your home faster than the 20 or 30 year fixed rate mortgage terms. With this mortgage your interest rate and payment or fixed for 180 months (15 years) and usually they do not come with a pre-payment penalty (confirm with your Loan Officer).

Your Adjustable Rate Refinance Options:

Those looking for an Adjustable Rate Mortgage (ARM) have multiple options to consider; here are the top three ARM options for those looking to refinance their current mortgage:

10/1 Adjustable Rate Mortgage: The 10/1 ARM has a fixed interest rate and fixed payment period of 120 months (10 years). After that the interest rate and monthly payment can adjust once per year for the remaining 20 years of the loan.
7/1 Adjustable Rate Mortgage: The 7/1 ARM has a fixed rate and payment period that last for 84 months (7 years) then adjusts each year for the remaining 23 years.
5/1 Adjustable Rate Mortgage: The 5/1 ARM has a fixed payment and interest rate period that lasts for 60 months (5 years) then adjusts each year for the remaining 25 years.

Most Adjustable Rate Mortgage loans do not have a pre-payment penalty however it's important you verify that with your Loan Officer.

Mortgage Pro-Tip:

Stay on top of current mortgage rates with a reputable source. This will allow you to make an informed decision on when to move forward with your refinance and when to lock in your interest rate.