The Top 3 Ways To Refinance In California

Refinance in California
Exploring refinancing options and programs

In today’s housing market, where prices rise and interest rates lower, everyone thinks about a refinance in California. But what programs and options are available? What loans, incentives and companies are right for me? In this article, we will explore those questions.

If you are in a financial pickle and you are thinking about refinancing in California, your first option may be an interest only loan. This loan would allow you to pay only the interest on your mortgage, saving you almost 75% every month. Of course, there are drawbacks to this program, one of which is paying mortgage payments while you have grandchildren.

It happens to all of us, a storm comes, knocks out your water pump, strikes down a tree that falls on your roof, or your pool develops cracks and it operates more like a river than a lake. For all of these major or minor home repairs, you may not be able to swing it financially. For these situations, there is an equity loan available to refinance in California.

A home equity loan is a desirable loan for several reasons. First, the interest rates are often lower on these loans. Second, qualifying for these loans is often easier than loans of another type. Finally there is the fact that you actually get cash most of the time, to use wherever it is needed most.

Drawbacks are much like other forms of refinance in California. You may pay on the loan for a while past when you would want it to be paid off. In case you need to sell, you may be unable to sell, or left in debt because the market goes down.

Jumbo loans are an option when you refinance in California. However, they carry a higher interest rate. The importance of these loans are for situations where the loan you need is for a property that is no longer worth what you paid for it, or when you need to get more money than the maximum set by Fannie Mae and others, which is $240,000 as of 1999.

Drawbacks are as mentioned, higher interest, but also this loan refinance option is very hard to qualify for.

How do I know which California refinance loan is right for me?

The answer to this question is simple. When you are ready to refinance in California, you need to ask yourself, “Why do I want a second mortgage?” If you answer ‘because I need more money to fix the home, buy property/business, pay bills, etc.,’ then you are going to want to go with the home equity loan.

If the answer is, ‘ I hate my interest rate or my payment’, then your options are going to be a fixed rate loan at a lower interest rate, or a an interest only loan if you have a change in circumstances that prevent you from making the full payment.

Of course, for those lucky few who are doing well financially, you may opt to refinance and secure a more aggressive loan to refinance in California. Such a loan is a balloon loan program that allows you to rather lease a home for several years. After the seven years, you can either refinance, probably at a lower rate, or buy the house outright. This is a great option for those with future windfalls.

No matter which option you choose to refinance in California, you are sure to find a loan out there that will save you money, or help you make those home repairs. Research and an honest view of your situation are all that are required.