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

All terms of the prior obligation terminate when the new financing funds pay off the prior debt. The terms and conditions of a refinance vary widely based on the risk, product choice, credit worthiness of the borrower, and state of the property. Borrowers refinance their mortgage for various reasons:

  • 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

Refinances are undertaken by borrowers to take advantage of market conditions, adjust their monthly budget, limit their exposure during financial difficulty, make the management of multiple debts easier, or gather a tax advantage in some situations.

Lowering your Payments

Decreasing the monthly payment on your mortgage by lowering the rate or extending the loan term can make the payment easier to make each month. If you are in the midst of significant life changes, taking proactive steps to reduce your monthly debt obligation to avoid possible delinquent payments is a sound strategy. We have a full range of products and loan terms to give you the ability to adjust your mortgage as you choose.

Cash-Out Refinances

Cash-out refinances may not help lower your monthly payment or shorten your mortgage term, but additional cash has unlimited applications. The equity (ownership) you have established in your previous down payment and monthly payments can be retracted out of your home as everyday currency for any expenses. Many borrowers pull out equity for home improvement, relieving credit card debt, and other debt consolidation. Refinancing through a cash-out allows you to realize the market value appreciation in your home before you ever sell the property. 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 financing 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. Not only can improving your home make it more appealing for you to live in, but it may make it more valuable as well. The increased value of your home 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 home, the equity in your current home can be a good source of down payment and closing funds for your purchase.
  • Education. A home equity line of credit gives you the flexibility to pay for tuition, room and board, books, and all the 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 use 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
Benefits It offers simple repayment terms, and the security of knowing your payments will never increase. It’s there when you need it, and you only make payments on what you use.

Contact Us

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!