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Mortgage Refinancing Options

Find out how mortgage refinancing can help you meet your financial goals

Why Refinance Your Mortgage?

Lower costs, adjustable rates, zero-down options: today there are a variety of reasons why homeowners are refinancing and making traditional 15 or 30-year fixed rate mortgages a thing of the past. There are five major reasons to consider mortgage refinancing depending on your unique situation and goals. The benefits include lower monthly payments, consistent payment amounts, an escape from a balloon payment, ending private mortgage insurance, and getting a chance to cash in on your home equity. Let's take a closer look into why you might consider talking with a loan originator about refinancing.

Reasons to Consider Refinancing

If you plan on residing in your home for the long-haul, refinancing can help shorten the term of your mortgage or secure a lower or fixed interest rate. This can lower your monthly payments and the overall cost of your home. You would refinance the remaining balance over a length of time that you can afford. However, if you intend to stay for the short term, evaluate whether you will be there long enough to cover refinancing costs. Before you decide, assess your break-even point to determine whether refinancing is financially viable at this time.

Keep in mind you may have to pay closing costs again, which can add up. Contact a loan originator to see if you qualify for a no-closing-cost option.

When refinancing, adjustable versus fixed mortgage rates are important to consider. Adjustable rates often have lower initial monthly payments, but their interest rates can increase over time. Fixed rates, on the other hand, provide set monthly payment amounts – and a consistent payment plan with a fixed rate could benefit your financial planning.

Balloon payment programs offer low initial monthly payments. However, at the end of your loan term, you will be responsible for the entire balance of your mortgage. This is not a mortgage product that I would recommend. If you currently have a balloon payment plan, you can easily refinance to an adjustable or fixed rate mortgage plan to ensure you can cover the cost of your entire loan in smaller amounts.

Zero or low down-payments for a mortgage allow consumers to purchase a home with less than 20% down, but most of these programs also require private mortgage insurance to protect the lender from default. If you have made significant contributions to your loan balance, talk to a loan originator to see if you may be eligible to remove this insurance from your payments by refinancing.

If your home's value has increased over the years, cashing in on home equity can serve as a great resource for additional cash. Refinancing your home can allow you to tap into its equity in a similar fashion as home equity lines of credit do. However, unlike home equity lines of credit, you'll receive the money in one lump sum rather than over time. Refinancing also has a longer term than lines of credit. From paying off credit cards and student loan obligations to making that long-overdue home improvement, there are numerous ways you can benefit from cashing in on your home equity. Cashout mortgage refinance options are easy – and may even be tax deductible!

Rates can change daily, so talk to a loan originator or banker to get the process started and lock in a rate. You'll need the same documents as a mortgage application – proof of income, proof of insurance, bank statements and your most recent tax returns. Standard mortgage guidelines apply when refinancing through North Country Savings Bank: no prequalification fees, no origination fees, and personalized service from an expert loan originator.

If you're ready to start the refinancing process or have further questions, stop by your nearest North Country Savings Bank to get started or fill out our online application and someone will contact you soon.