California Refinance

Is California mortgage refinancing right for you?

If you have been living in your home for a while, it might be the right time to consider refinancing your mortgage. There are many good reasons in California to consider refinancing, including lowering your interest rate, consolidating your bills, shortening your loan term, switching from an adjustable to a fixed rate or taking advantage of your home's equity.

California Rate Reduction

Generally, if your closing expenses can be recovered within the first 30 months of the new loan, mortgage refinancing is probably a good idea.

Loan Term Reduction

There are several advantages to reducing the term of your existing loan. Although you may experience slightly higher monthly payments, a loan term reduction due to mortgage refinancing often translates into a significant reduction in interest costs, as well as a more rapid build-up of equity.

Switch From Adjustable to a Fixed Rate, or to a New ARM

You may have an adjustable rate mortgage (ARM) you're not entirely satisfied with. Maybe the rate is higher than you like, or the potential for rate increases looms ahead. If you plan on staying in your home at least five years, now might be an excellent time to switch to the payment security of a fixed-rate loan. Or, if you plan on moving in less than three years, consider refinancing to a new ARM to take advantage of the low starting rates that may be available. Even if the new ARM's rate rises at the first adjustment interval, the starting rate may be low enough to offset any increased payment costs.

Mortgage Consolidation

If you are carrying a first and second mortgage on your California home, and want to combine the two loans into one favorable rate, mortgage refinancing might be for you.

Tax-free Cash Via Equity

Many borrowers have built up significant California home equity over the years through appreciation and principal reduction. These borrowers may refinance an existing mortgage to a larger loan amount, with the additional funds used for any purpose - investment, car, tuition, debt consolidation, etc. And, unlike any other consumer loan, the interest paid on the "cash out" could be 100% tax deductible! (Consult your tax advisor.)

Balloon Payment Due

If you have a balloon mortgage with a lump sum payment due in the near future, consider refinancing if you are comfortable with the current rate environment.

Find Out the Facts First

If you are thinking about refinancing, but aren't sure whether it will really save you money, it may well be worth a visit to your mortgage professional in California who can help you calculate how much your new monthly payments will be, as well as the cost of refinancing.

Going Through the Process

When refinancing your home, lenders will need many of the same documents you supplied for your first closing. A new credit check, survey, title search and insurance, an appraisal, and an inspection are usually required. Depending on the loan program you select, you may also be charged loan origination fees and, perhaps, points.

As California mortgage interest rates begin to drop, many homeowners' thoughts turn to refinancing. And with good reason! When your existing loan is replaced with one that has a lower rate, you benefit from lower monthly payments.

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