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Q. |
What are the
advantages of refinancing my home? |
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A. |
There are many
great reasons to refinance your home. With today's low cost
and no cost refinance options, now even a small reduction in
your interest rate can still make sense. Some good reasons
to refinance are as follows: convert a current adjustable
rate into a fixed rate mortgage, reduce your current
interest rate to a lower fixed or adjustable rate, cash out
some of your equity for debt consolidation, renovations, or
a variety of other reasons, remove mortgage insurance if
you've reached the 20% equity mark, or combine a first and
second mortgage into one mortgage and one payment. |
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Q. |
Do you have low
cost or no cost options? |
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A. |
Absolutely. With
the large variety of loan programs available today, we can
get you into a new home or refinance your existing loan with
no cost or minimal cost to you. Your savings will be
immediate and you won't have to sacrifice your savings or
equity to get a great rate. We offer no down and low down
payment home purchase options and no cost refinance
programs. Just ask one of our friendly Mortgage Consultants
for our flexible financing options.
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Q. |
Can I eliminate
Private Mortgage Insurance (PMI) by refinancing? |
|
A. |
As long as you
meet the requirements, you may be able to remove PMI by
refinancing your new home. The main factor is that you have
made your mortgage payments on time over a specific time
period (usually a year) and that your home has appreciated
enough to reach the 20% equity mark.
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| Adjustable Rate
Mortgage |
|
Q. |
What is an ARM? |
|
A. |
An ARM is an
Adjustable Rate Mortgage. This means the interest rate is
adjusted on a pre-determined timeframe, and moves based on a
pre-selected index. Common indices include Prime Rate,
Libor, Cost of Funds Index, Treasury Bill and others. The
interest rate and payments rise and fall with the index. |
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|
Q. |
Why should I
choose an ARM over a fixed rate mortgage? |
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A. |
The ARM mortgage
can be appealing because it typically offers a lower
interest rate. A lower interest rate in turn can mean a
lower monthly payment. Borrowers can purchase larger homes
than they otherwise could buy without this option. An ARM
product can be a great option for borrowers who plan to own
their home for a shorter period of time or want to keep
their payments as low as possible. |
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|
Q. |
What is the
difference between an ARM and a Fixed Rated Mortgage? |
|
A. |
With a fixed rate
Mortgage your rate and monthly payments remain fixed
throughout the life of the loan (usually 15, 20, or 30
years). Adjustable Rate Mortgages (ARMs) fluctuate in both
rate and payments after an initial fixed rate period
(usually 1,3,5, or 7 year). There are long and short term
considerations with both. Let us help you figure out which
fits your financial needs.
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|
Q. |
What types of
ARM products are available? |
|
A. |
Great Oak Lending
offers several types of ARM products. Traditional ARMs are
home loan programs that amortize over 30 years and offer
interest rates that periodically adjust. Hybrid ARMs are
home loan programs that have an initial fixed rate period,
after which the home loan converts to an adjustable rate.
Interest-Only ARMs are home loan programs that feature a
monthly payment that is applied to the interest portion of
the home loan, freeing up the amount that would typically go
toward paying off the principal.
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