Refinance to swap your old mortgage for a new and better one.
Interest rates change, so do our needs and finances. What worked for you when you first got your mortgage might not be working now. Refinancing your mortgage allows you to change your interest rate, monthly payment and loan terms to better meet your needs.
Benefits of Refinancing Your Mortgage with San Francisco Federal Credit Union
Whether you have an existing San Francisco Federal Credit Union mortgage loan or one with another lender, we have options that can save you money.
Some benefits of mortgage refinancing include:
- Decrease your monthly payment: Refinancing can help you lower your monthly payment by increasing your term and/or lowering your interest rate. This can be a great option if your income situation changes and you need to lower your mortgage payment.
- Decrease the total interest paid on the loan: By shortening your term or decreasing your interest rate, you can decrease the total interest you pay over the life of the loan. This is especially true if you switch from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate Mortgage when rates are low.
- Consolidate other debt: Refinancing can be an option if you have a Home Equity Loan or Home Equity Line of Credit and can save money by consolidating it into your mortgage.
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Mortgage Refinance FAQ
Q: When should I refinance my mortgage?
A: If you are thinking of refinancing your home to save money, take time to do the math and determine if it will actually get you the right amount of money. Consider the amount of time you plan to stay in your home as well as the impact of things like closing costs and pre-payment penalties.
Here are some indicators that it’s probably time to consider refinancing:
- If it’s early on in your mortgage term. Refinancing is usually best if you’ve been in your home a short time as your payments are primarily going toward interest. Down the road when you shift to paying more principal than the interest, keeping your original loan may be best.
- If interest rates are dropping. It may be a good time to refinance if mortgage rates are falling. By either keeping your current repayment term and lowering your monthly payments or keeping your monthly payments relatively the same and shortening your repayment terms, you may reduce your total borrowing costs.
- If your home’s value increased. If your home has significantly increased in value, refinancing may allow you to take advantage of that boost in equity. You could then use those funds to pay off debt or make a large purchase.
Q: Why should I refinance?
A: If you want to lower your monthly payment, pay off your home sooner, or just save money on interest by lowering your interest rate, you might want to refinance your mortgage:
- If it’s early on in your mortgage term. Refinancing is usually best if you’ve been in your home a short time as your payments are primarily going toward interest. Down the road when you shift to paying more principal than the interest, keeping your original loan may be best.
- If interest rates are dropping. It may be a good time to refinance if mortgage rates are falling. By either keeping your current repayment term and lowering your monthly payments or keeping your monthly payments relatively the same and shortening your repayment terms, you may reduce your total borrowing costs.
- If your home’s value increased. If your home has significantly increased in value, refinancing may allow you to take advantage of that boost in equity. You could then use those funds to pay off debt or make a large purchase.
Q: How is the APR on a mortgage loan determined?
A: Mortgage loan index rates vary from day to day based on the Prime Rate, which the U.S. Federal Reserve influences. From there, we determine what rate you qualify for by checking such things as your credit score, payment history and employment history. The better your finances, the lower the rate you are offered.
For information about mortgage loan variables, please contact us to speak to one of our knowledgeable mortgage team members at 800-852-7598, extension 2977.
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Get the Mortgage to Fit Your Needs With San Francisco Federal Credit Union
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