REFINANCE
FEATURES
Homeowners refinance not just to take advantage of low rates, but to reduce their mortgage costs, pay off their mortgage earlier, or help pay off debts, Lexington Home Loans can help make refinancing quick and easy by simplifying the process and providing assistance at each stage.
If the rate you pay on your existing mortgage is higher than current interest rates, you may save money by refinancing. You may most benefit refinancing if:
- You plan on living in your home for a number of years
- You've build up considerable equity in your home
Lower Your Monthly Payments
If interest rates are lower than when you bought your house, refinancing may lower your monthly payment* and the finance charges you pay over the life of the loan.
*By refinancing your existing loan, your total finance charges may be higher over the life of the loan.
Stabilize Your Monthly Payments
Converting from an adjustable to a fixed rate mortgage may keep your monthly payments from changing over time.
Convert Equity/Cash Out
If you've build up considerable equity in your home, you may be eligible to refinance your existing mortgage to a large loan amount. This would provide you additional cash that could be used for debt consolidation, home improvement, or for personal use. The interest paid on your "cash out" refinance, unlike personal loans, could be tax deductible (consult your tax advisor).
Reduce The Length Of Your Mortgage
Reducing the number of years on your existing mortgage often provides a significant reduction in interest costs over the life of the loan. Although this strategy may mean higher monthly payments, you will own your home faster and become free of mortgage debt quicker.
Closing Fees
Because refinancing involves taking out a new mortgage, you will usually have to pay many of the same fees you incurred with your existing mortgage, such as points, title insurance, and loan origination fees. To minimize the refinancing costs, consider a loan with a slightly higher interest rate and fewer discount points, or finance your closing costs as part of your total new loan amount.
Secure your rate
Consider your interest rate options before securing a mortgage loan. Learn more about rate locks on our Secure Your Rate page.
If you would like to view and to compare all of our available mortgage programs we have a Product Comparison Chart.
FIXED VS ADJUSTABLE RATE MORTGAGE
One of the most important decisions your face in the loan process-and often the hardest-is whether to take out a fixed or adjustable rate mortgage.
What's the difference between the two? In general terms, a fixed mortgage locks in at whatever prevailing interest rate is in effect at the time you arrange the loan. So no matter what happens to interest rates or inflation, your monthly principal and interest payment stays the same throughout the life of your loan. That stability is one reason why fixed rate mortgage are the most popular way to finance a home in America.
The mortgage payment for an adjustable rate mortgage, on the other hand, can change over time, since it continually "adjusts" to changing interest rates. That is good for lenders, because the rate keeps up with the prevailing rare. As a result, adjustable rate mortgages typically started at a lower interest tare than fixed mortgages do, and so your monthly principal and interest payment will be lower.
So, if the rate is lower, shouldn't you just choose an adjustable rate? The answer is: it depends. Anyone taking out an adjustable rate mortgage should be able to answer yes to the following questions:
- Can I afford to make higher mortgage payments if rates go up?
- Do I believe that rates will remain the same or decline in the future?
- Do I plan on moving before 5-7years?
The trade-off for the lower payments of adjustable rate mortgages is greater uncertainty in the amount of the payment. Deciding if the risks are worth it is a personal decision for every homeowner. Sometimes knowing your interest rate and monthly payment will not change can be an added peace of mind.
If you would like to view and to compare all of our available mortgage programs we have a Product Comparison Chart.
Lower your interest tare and start saving on your monthly payments*, Lexington Home Loans can of the following loan products with the security of fixed rate payments:
15 Years Fixed Rate
Choose this if you want:
· A shorter loan life and lower rates
· To remain in your house less than 10 years
· Greater saving over the life of the loan if low monthly payments are not a priority
30 Years Fixed Rate
Choose this if you want:
- Low monthly payments that don't change
- A loan that's generally easier to qualify for
- To remain in your home longer than 10 years and pay off your loan
- The maximum tax advantage (please consult your tax adviser)
REFINANCE FAQ
- How do I refinance my existing loan?
- How do I calculate the value of my property?
- Can I make extra principal payments so I can pay off the loan more quickly?
- What is a cash-out option?
What Kind of Information Do I Need To Provide Lexington Home Loans On My Loan Application?
To refinance your loan in order to obtain a lower interest tare and start saving on your monthly payments, Lexington Home Loans can offer you the following loan products with the security of fixed rate payments:
15-Years Fixed Rate Refinance
Choose this if:
· You want a shorter loan life and lower rates
· Low monthly payments* are not a priority
· You're planning to remain in your house less than 10 years
LexTrue℠ No-Cost Refinance
Our roll down option allows you to refinance with few or no out of pocket fees! While the rate is slightly higher, you will pay few or no fees to get you new loan. In effect as long as our roll-down rate is lower than your existing rate, it makes financial sense to refinance because there is little or no cost in doing so.
CASH OUT OPTION
If you equity in your property qualifies, you can refinance with a loan amount greater than your current mortgage - and keep the difference! Use it for home improvement, debt consolidation, or whatever you want.
30 Years Fixed Rate Refinance
Choose this when:
- You want low monthly payment* that do not change.
- You want a loan that's generally easier to qualify for
- You've planning to stay in your house for greater than 10 years – especially if you're planning to completely pay off your loan
- You want the maximum tax advantage (please consult your tax adviser)
How do I Calculate The Value Of My Property?
Property appraisal – property value Since a mortgage is a loan secured by a piece of real property, a crucial factor is in the correct value of the property question.
Property value can be determined in a number of ways:
- The Market Value of the property: that is , what a buyer will pay for it, and what other comparable properties (comps) in the neighborhood have recently sold for.
- The Appraised Value of the property – that is , what a trained and licensed professional deems the property to be worth based on an inspection , comps, and a thorough analysis of the property and its neighborhood.
Additionally, the appraiser estimates the replacement value of the property, that is , the cost to build a house of similar size and construction in a vacant lot. The appraisal reduces this cost by an age factor to talk into account deterioration and depreciation.
Can I Make Extra Principal Payments So I Can Pay Off The Loan More Quickly?
Depending on the loan, and what you state permits, it is feasible for you to make extra payments on the loan. Extra payments will have an effect on the amortization schedule over the remaining term of your loan.
What Is a Cash- Out option?
If you equity your property qualifies, you can refinance with a loan amount greater than your current mortgage- and keep the difference! Use if for home improvement or whatever you desire.
Disclosure: *By refinancing your existing loan, your total finance charges may be higher over the life of the loan. (10VAC5-160-60F)
