Video Overview: Choosing the Right Mortgage Refinance Option

• Questions Your Broker will Ask
  • If you are unsure what option is right for you, your broker will ask you some basic questions to help determine the best action.
  • The first question is how long you plan to keep the home. If you plan to stay in it for a long time, then it makes more sense have a fixed-rate loan. But if you think you will sell it after a short time, then an adjustable rate mortgage or an intermediate adjustable rate mortgage makes more sense.
  • The next question will be about your income situation. If you are not making a lot of money but would still like to buy a home, your broker will look for an interest-only loan, which keeps the monthly payment lower.
• 15 vs 30 year Mortgages
  • The choice of a 15 or a 30 year mortgage is mainly a personal decision. Both options have advantages depending on your situation.
  • A 30 year mortgage will give you a lower monthly payment, but you will pay a lot more interest.
  • A 15 year mortgage means you'll pay more per month, but less total for your home.
  • There isn't a huge difference in interest rates between the two, but a 15 year mortgage will usually have a smaller interest rate.
  • Right now the interest rate on fixed rate mortgages is lower than the rate on intermediate ARMs.