Refinance With Garvens Group of Churchill Mortgage

For many homeowners, the mortgage they have may not be the best mortgage they could have. While long-term, fixed-rate financing has its benefits, they cannot adapt to changing conditions, whether those changed conditions are improvements in the market or the evolving needs of a homeowner. Virtually all homeowners will elect to refinance their mortgage before it matures, and most will do so several times. A Refinance can offer a multitude of benefits, and it’s important for homeowners to understand the options available and how to use these options to achieve their unique financial goals.

The most common reason for a homeowner to refinance is simply to secure a lower interest rate on their mortgage payment and therefore lower their monthly payment. Especially with the historically low rates of the last few years, homeowners can realize savings of hundreds of dollars per month by refinancing from, say, a 6% mortgage that was common throughout the 2000’s to a 3% or 4% mortgage today. Refinances done for the sole purpose of lowering one’s interest rate are known as rate-and-term refinances, since the only variables that can change are the interest rate or the duration of the loan.

For a conventional rate-and-term loan, the borrower must qualify for the new mortgage and therefore must provide income documentation to the lender as part of the loan application. FHA and VA loans offer “streamline” refinancing options. As long as the only changes to the loan involve the rate or the term, a borrower can refinance without documenting their income and without having their home appraised. This makes the entire refinancing process quicker and less expensive.

Saving money each month is one reason to refinance. Another is to tap the equity in one’s home and then utilizing that cash to achieve some other financial goal. Such refinances are known as “cash-out” refinances since, as the name implies, the homeowner is taking cash out of their home. This cash can then be used to pay off debt or as a down payment on an investment property. Since the loan is secured by an asset—the home—it is much cheaper than getting an unsecured loan from a bank. A homeowner can also generally tap into more equity than is available through instruments such as a Home Equity Line of Credit (HELOC) since the leverage caps (that is, how high of a loan balance is being secured by the property) on HELOCs are lower than on first mortgages. In fact, with a VA cash-out the borrower can literally cash-out 100% of the home’s equity. Conventional loans, meanwhile, typically cap the loan-to-value ratio at 90%.

A mortgage is a massive, expensive, and inflexible liability that is also secured by a powerful asset—a home. While a mortgage itself can seldom be modified to help a homeowner with their financial goals, they can be refinanced into new mortgages that better suit the homeowner’s needs. By coupling the sheer number of available refinancing options with a loan officer who can consider these options in a sober and, if necessary, creative way, homeowners can achieve any number of financial goals in a secure and responsible manner.

Loan Options:

Conventional Loan          FHA Loan          VA Loan

Company NMLS ID # 1591 (; CO–Mortgage Company Registration, Churchill Mortgage Corporation, 104 S Cascade Ave. Ste. 201A, Colorado Springs CO 80903-5102, Tel 888-562-6200, Regulated by the Division of Real Estate
© Copyright 2015 - Garvens Group of Churchill Mortgage - All Rights Reserved - Website by Burjon Marketing
Apply Today