Refinancing refers to replacing an existing debt obligation with a new loan under different terms.

There are a variety of reasons borrowers may choose to refinance their mortgage:

  • To reduce their interest obligation either through the interest rate or length of the loan term
  • To consolidate debts into one loan
  • To reduce their monthly payment amount
  • To change their market risk exposure
  • To take out cash for other uses

All prior loan obligations terminate when new financial funds are received and prior debts paid off. The terms and conditions of a refinance vary widely based on risk, product choice, credit worthiness of the borrower, and state of the property. 

Lowering your Payments

Taking proactive steps to reduce your monthly debt obligation to avoid possible delinquent payments is a sound strategy. A refinance can reduce monthly mortgage payments with lower interest rates or an extended loan term. At Starboard Financial, we have a full range of products that gives consumers the freedom to adjust their mortgage as they see fit.

Cash-Out Refinances

Different than a regular refinance, a Cash-out refinance isn’t about lowering your monthly payments or reworking loan terms. It’s about taking the equity that has been established in your previous payments out of your home as everyday currency. When borrowers pull equity for home improvement, relieving credit card debt, or other debt consolidation, it helps them understand market value appreciation before the property is sold. In some cases, when combined with a second mortgage, you can refinance into a loan amount above traditional standards and keep the cash proceeds.

Home Equity Loans and Lines of Credit

Financing major purchases through home equity loans or lines of credit may be a more practical way to pay rather than using cash, credit cards, or other types of financing. Consider a home equity loan or line of credit for:

  • Improving your home. Improving your home can make it more appealing to live in and increase its value. The increased value after renovation may be enough to offset the cost of the project.
  • A second home. If you’re in the market for a vacation or investment property, the equity of your current home can be a good source of funds for a down payment and closing costs.
  • Education. A home equity line of credit gives you the flexibility to pay for tuition, room and board, books, and other costs of putting your kids through school.
  • Big events. Life is full of big events with big price tags. Whether you’re looking forward to a wedding, a new baby, or a family trip to Hawaii, home equity financing can make paying for them easier.

Comparing Home Equity Loans and Credit Lines

  Home Equity Loan Home Equity Line of Credit
What you get A single lump-sum payment for the full loan amount. A revolving source of cash that you can draw from as needed.
How you use it To finance large one-time expenses that have a definite cost. To finance ongoing expenses or miscellaneous purchases, like
you would a credit card.
How you pay it back Repay the full loan amount over a specific time period at a fixed interest rate. Make payments on the outstanding balance at a variable interest rate.

Repayment terms are simple and secure, since payments will never increase.

It’s there when you need it. You only make payments on what you use.

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More Info

Contact Us today if you would like to discuss the Refinance process further or if you have any inquiries about our product offerings. If you do not have any questions and are ready to submit your information for a loan decision, please Apply Now.

Thank you for letting Starboard Financial show you -The Right Way- in mortgage lending!