Lower Payments

Lower Payments

LOWER PAYMENTS. GREATER FREEDOM.

When it comes to paying monthly bills, we would all prefer lower payments. If you qualify to refinance into a loan with a lower rate or better terms, you may be able to reduce your payments and/or pay down your principle faster. Depending on your current loan, you could save hundreds of dollars each month — and maybe thousands over the remainder of your mortgage.

* Note: Total finance charges may be higher over the life of the loan.

When Is It Best to Refinance? And Should You?

Generally speaking, the best time to refinance your mortgage is when your current financial picture is a lot better than it was when you signed your original loan. This may mean you have some combination of a higher income, less debt, a better debt-to-income ratio and a better credit score. All of these factors could result in you qualifying for a lower interest rate than you did originally, and possibly even a more advantageous loan type.

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First-time homebuyers or buyers who didn’t have the greatest financial picture when they bought their home often benefit the most from this situation. If the interest rate on your mortgage was high because of your credit score, your payment is most likely higher than it would be today with an improved credit score. If you didn’t put at least a 20% down payment, you may have had to opt for an FHA loan or a loan that requires you to pay private mortgage insurance (PMI).

In both these cases, you could potentially save a lot of money on your monthly payment by refinancing to lower your interest rate and/or change from an adjustable-rate to a fixed-rate mortgage. It’s even possible that you could shorten the remaining length of your mortgage by switching from a 30-year to a 15-year mortgage, depending on your situation.

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Just a 0.25% difference in a mortgage interest rate could mean a noticeable difference in a monthly payment. That could add up very quickly.

If interest rates are rising, is it a bad time to refinance?

Absolutely not. Decades ago, rates reached double digits. Even if rates are rising right now, they could still afford you the opportunity to refinance and improve your financial situation. In general, if rates are low, it’s a smart time to refinance. But even if they’ve been rising, the rate you have now could still be higher.

If you have an adjustable rate mortgage (ARM), is now the time to refinance?

It absolutely could be. Refinancing now may not lower your mortgage payment, but it does fix the rate for the remainder of the loan, so there will be no more surprises for your budget. Contact an Embrace loan specialist for an evaluation of your current mortgage and opportunities to optimize your budget.

SHOULD I REFINANCE MY MORTGAGE?

What can I expect during the refi process?

Several factors are taken into consideration when you refinance your home, including your credit score, your debt-to-income ratio, and your loan-to-value ratio. Your Embrace mortgage specialist will explain the significance of each and help you find the loan that’s right for you.

With our streamlined process, you can get a new mortgage in three simple steps: apply, approve, close. Your dedicated loan expert will let you know what documents are needed, have your home appraised, and walk you through the entire process from beginning to closing.

Call 800-333-3004 to speak with an Embrace Loan Officer today. Or fill out this form and one of our specialists will contact you. There is no obligation so there’s nothing to lose.

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TYPES OF LOANS

What are the benefits of refinancing?

Embrace offers many types of home loans, each with unique advantages depending on your needs. Our mortgage specialists can help you find the loan that works best for you. Find out more and learn the pros and cons for each of these types of loans:

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30 Year Fixed-Rate Refinance Mortgage Example:
The payment on a $225,000 30 year fixed-rate cash out refinance loan at 3.875% with a 70% loan-to-value (LTV) is $1058.04 with 2 points due at closing. The Annual Percentage Rate (APR) is 4.123%. This assumes a FICO score greater than 680. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.

30 Year Fixed-Rate Purchase Mortgage Example:
The payment on a $225,000 30 year fixed-rate purchase loan at 3.49% with a 70% loan-to-value (LTV) is $1,009.10 with 2 points due at closing. The Annual Percentage Rate (APR) is 3.733%. This assumes a FICO score greater than 700. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.