Refinancing Your Home
Swap out your old loan for a new (and better!) one. Whether you have an existing San Francisco Federal Credit Union loan or one with another lender, we have options that may save you money. We offer both fixed rate and adjustable rate mortgages (ARMs), with no pre-payment penalties and no private mortgage insurance (PMI) or upfront mortgage insurance premium (UMIP) on many loans.
If you are thinking of refinancing your home to save money, take time to do the math and determine if it will actually net you the right amount of money. Consider the amount of time you plan to stay in your home as well as the impact of things like closing costs and pre-payment penalties.
When to Refinance
- If it’s early on in your mortgage term. Refinancing is usually best if you’ve been in your home a short time as your payments are primarily going toward interest. Down the road when you shift to paying more principal than interest, keeping your original loan may be best.
- If interest rates are dropping. It may be a good time to refinance if mortgage rates are falling. By either keeping your current repayment term and lowering your monthly payments or keeping your monthly payments relatively the same and shortening your repayment terms, you may reduce your total borrowing costs.
- If your home’s value increased. If your home has significantly increased in value, refinancing may allow you to take advantage of that boost in equity. You could then use those funds to pay off debt or make a large purchase.
- To lower your monthly payments. Want to free up cash? If you’re planning on being in your home for a while, you may want to refinance for a longer term; if you’re looking to move in a few years, you may want to opt for a lower rate adjustable-rate mortgage (ARM). Either way, you could lower your monthly payments.
- To reduce the home’s total cost. Provided rates are lower than when you purchased, refinancing for a shorter term may allow you to pay your home off sooner and lower your interest payments. Your monthly payments will be relatively the same and you could save thousands in interest over the life of the loan.
- To take cash out. Taking cash out means using your home’s equity to refinance for more than you owe on your principal mortgage balance in order to get a cash payout. Keep in mind that cash-out refinancing does increase your overall mortgage debt.
Once you’ve determined that conditions are right for you to refinance, work with one of our mortgage professionals to select the best refinancing option.