If you currently have a high rate mortgage, securing a Las Vegas refinance loan can save you a considerable amount of money over the life of the loan and make your monthly payments easier to manage. Refinancing replaces your current mortgage with a new loan that pays off the old one and also has a lower interest rate. Determining whether refinancing is right for you depends on the interest rate of your existing loan as well as the refinance rate. Use our mortgage calculator to see if you are a candidate.
Advantages of a Las Vegas Refinance Loan
Most homeowners refinance their existing mortgage to get a lower rate on than the one on their existing loan. Refinancing with Fairway Independent Mortgage Corporation can have other advantages depending on your situation. These include:
- Reducing the length of your term to pay off your debt more quickly
- Consolidating home equity lines of credit with your current mortgage to avoid additional interest
- Changing the loan type from a variable rate to a fixed rate
- Consolidating debt from high-interest rate credit cards
- Taking advantage of your home’s equity to finance purchase or home improvement projects
- Take more time to pay off a large loan, such as a balloon mortgage, that is due
What You Should Know Before Refinancing Your Home Loan
Refinancing isn’t free as there are costs associated with it. Just as with your initial loan, you’ll pay closing fees. Another potential drawback occurs when you choose a new loan with a longer term. Although you may have a lower monthly payment, you’ll pay more in interest over the life of the loan. Lower monthly payments may be necessary for some people whose work circumstances have changed, but whatever you do, run some numbers and speak with your loan officer to determine the best course of action.
If your closing costs are high, it will take you longer to recoup the money spent. For example, if you will save $200 per month on your mortgage and your closing costs are $4,000, it will take 20 months to break even.
Also, take a look at benefits of your current loans before replacing them with a new one. Federal student loans, for example, are more flexible with payback options than private student loans. You can lose such benefits when refinancing. (Read more about renovation home loan here.)
Refinancing Options Available Through Fairway Mortgage
We have several options available for a Las Vegas refinance loan. Each has different advantages. Take a look at each to see which option may benefit you.
A cash-out refinance has several advantages. Basically, it allows you to take more money out of your home that what you currently owe, so it allows you to pay for other expenses such as college tuition or a home remodeling job. If you need to borrow money, this is often a better way to do it as putting home repairs on a credit card, for example, will result in higher interest rates.
Refinancing in this manner may also give you a big tax advantage as the interest paid on home loans is tax deductible. The biggest advantage to this type of refinancing is the cash reserves you will get. You can use the money any way you desire. Cashing out is common to pay off debt, make home repairs or to pay for college.
Adjustable-Rate Mortgage (ARM)
Adjustable rate mortgages typically come with lower introductory rates, which can benefit you if you anticipate a future pay increase or plan to stay in your home only for a few years. Refinancing with an ARM is sometimes an option when your current ARM is about to reset, especially if you anticipate that the reset will be at a much higher rate.
Refinancing to a fixed=rate mortgage from an ARM is particularly popular for homeowners who want to avoid the costs associated with rising interest rates. Not only will you have protection against rising interest rates, you’ll also benefit from a greater variety of terms that include 15-year, 20-year and 30-year mortgages. Knowing that your payment won’t change will also allow you to budget more accurately.
The professionals at Fairway Independent Mortgage Corporation are here to help and can guide you through options to find the best refinancing solution for your needs.