The last benefit to discuss is changing your interest rate and type. Interest rates are structured in various ways, especially for home mortgages. One way it can be structured is as a fixed-rate mortgage. A fixed-rate mortgages keep the same rates for the life of the mortgage unless refinanced prior to making the final payment.
Another way is as an adjustable-rate mortgage, or ARM. An adjustable-rate mortgage has a fluctuating rate based on predictive scheduling, which attempts to match market rates as they also change each year. ARMs, which are also sometimes called variable-rate mortgages, most frequently begin as fixed rates for a predetermined period of time.
But then, if your equity and credit score are high enough to allow it, you can refinance your fixed-rate mortgage and turn it into an adjustable-rate mortgage, or variable-rate mortgage.
The benefit of making the change is, you can turn it into an ARM right before your fixed-rate mortgage amount is due to increase. So, you can save hundreds, if not thousands of dollars in interest fees and charges.
Knowing what lenders are out there is the best way to find the loans that are right for you, and know your options. There are both direct online lenders and lending referral services available.
Dealing with direct online lenders is similar to dealing with your credit union or bank. A lending referral company scouts the best available rates and terms for you, while also taking percentages of approved loan amounts as finder’s fees. This may or may not affect charges assessed to you, but it does make finding the best rates more convenient.
Some of the best refinancing companies today include:
• AmeriSave Mortgage.
• Quicken Loans.
• New American Funding.
• Acopia Home Loans.