St Louis Home Mortgage and Retention Services can help you find the best refinancing options for your situation. Here is some information to get started. If you’d like to discuss your options in more detail please give us a call or fill out the form on the right. We would be happy to show you the best refinancing options.
Why should I want to lower my interest Rate?
- Reducing your mortgage interest rate can save you thousands of dollars over the life of your loan
- The bigger the gap between your loan’s interest rate & current rates the bigger the savings for you
- If your credit worthiness has changed for the better you may get a better rate or qualify for better loan terms
If I refinance how much money could I save?
There are Three Ways to Save:
- Lower Monthly Payment – frees up monthly cash
- Lower Overall Interest Charges – lowers the total cost you pay for your home
- Pay Off Your Loan Sooner – using a similar payment, but more goes towards principal and less towards interest – thus paying down the loan faster
Real savings typically occur when you have a reduction of at least 1% in your interest rate Your savings will vary depending upon your loan balance, length of your loan, and your credit worthiness
Here is a simplified refinancing example for reducing the interest rate by -2%:
Loan Balance $200,000 Payment (P&I) = $1,199 Loan Rate = 6% 25 years left
New Refinance Interest Rate = 4% New Payment (P/&I) = $1,055 25 years left
- Refinancing lowers the monthly payment by $144/month
- Save a total of $43,200 in interest over the 25 year life remaining on the loan
- Refinance & Pay (P&I) $1,212 per month ($13 more per month) and shorten the loan by 5 years
In addition, when refinancing a loan, closing costs can occur and are required to be paid at closing – so let us help you determine if the rates are low enough to benefit you.
Depending upon your specific goals and situation the numbers will vary. You will have many options to consider and working with a St Louis Home Mortgage professional can ensure you get the right loan for your situation.
Why should I Shorten the Length of my Loan?
- Lower Interest rates mean less interest charges on your loan
- Keep your Payment close to the same – maybe a slight increase
- More of your payment goes towards the principal loan balance
- Can significantly reduce the time to pay off your loan
- Can significantly reduce the total amount you pay to own your home
- Pay off your loan faster to eliminate your mortgage payment altogether
Why Should I Change from a Variable Rate to a Fixed Rate?
- Plan on staying in your current home for the foreseeable future
- Low interest rate environment offers a better overall deal
- Fixed rate loans provide the certainty of an interest rate for the life of the loan
- Fix your monthly payments for principal and interest
- Knowing what your payment is month after month and year after year provides a much greater degree of predictability in your monthly budget
I want to Convert some of my Home Equity into Cash
When is the best time to consider Converting Home Equity into Cash?
- You have built up equity in your home
- Current interest rates are at least 1% lower than your current loan
- May even allow you to lower your payments too
Many homeowners utilize refinancing to improve their loan & also raise cash
- to pay off other debt
- to make home improvements
- to pay for college
- to pay for a wedding
- for other purposes
We can help you determine whether refinancing is viable for you.
Typical Loan Features for Converting Home Equity to Cash Refinancing
- Cash out available to 80% loan-to-value on conventional loans
- Cash out available to 85% loan-to-value on FHA loans
- Cash out available to 100% loan-to-value on certain Veteran Affairs loans
- Recently listed properties may qualify
I want to Refinance my FHA Mortgage
The Federal Housing Administration (FHA) offers options to lower loan rates, including a “Streamline” refinance. This will allow you to lower your rate and minimize closing costs on a new FHA loan. No changes can be made to the ownership of the property.
STREAMLINE LOAN FEATURES
- No appraisal required for many FHA loans
- Limited underwriting and credit review
FHA REFINANCE LOAN FEATURES
- Loan-to-value of up to 96.5%
I want to Refinance my VA loan
- Veteran Affairs (VA) loans provide financing for qualified veterans, reservists or active duty personnel
- Homeowners typically have to pay a one-time VA funding fee that can be financed into the loan amount
- The existing VA loan may qualify for an Interest Rate Reduction Loan (IRRL). This will allow you to lower your rate and minimize closing costs on a new VA loan
- No changes can be made to the ownership of the property
LOAN FEATURES OF AN IRRL
- No appraisal required for many VA loans
- Limited underwriting and credit review
LOAN FEATURES OF VA REFINANCE
- Loan-to-value of up to 100%
- Allows closing costs to come from a gift