Guide to Refinance, Mortgage,
& Home Equity Loans in
Cerritos, California (CA)

Cerritos , California is part of Los Angeles County . It is also known as one of the Gateway Cities. Cerritos has a rich history and was established by the Tongva Tribe. If you currently live in Cerritos , you may already have a home mortgage. You might not realize how much interest you are paying for your mortgage. Depending on the type of mortgage you have your interest rate may never change or it may change annually. Below are two options you have in lowering the interest rate on your mortgage to benefit your monthly expenses.

• Home equity loans are often called second mortgages. A second mortgage is designed to get you the equity out of your home with out selling it. When you sell your home you try and sell it for the appraised value of the home in order to get your money’s worth from the investment. The equity of your home is defined as the appraised value minus the amount owed on your home. This means the difference of those two values is what you will gain. You will not pay off your existing loan therefore the term second mortgage applies. Equity can help you to pay off higher interest rate debts, student loans, or take a vacation. Determining what you will use this loan for is important when considering taking on another loan. An advantage to this loan is the special low interest rate reserved for home equity loans. If you are using the money for a vacation, consider the costs of closing on a new loan, and the interest you will have to pay. Likewise, when you are looking to pay off other debts consider the cost versus the savings you will have.
• Refinancing is another option if a home equity loan seems a higher cost than the benefit. Refinancing allows you to pay off your existing loan with a new loan. The advantages of this method are decreasing your interest rate thus decreasing your monthly payment, extending the life of the loan to save on expenses, or to consolidate other higher interest rate debts into one low monthly payment. Disadvantages of this process are the costs incurred when closing on the new loan. You need to make sure your savings are significant to the costs. I.E. you will want a significant change in interest for the new loan to out way the refinancing costs. Consolidating other debts into a home mortgage loan can decrease your monthly payment and help you get out of debt, especially when the expenses are beginning to hinder your payments. You do not want to affect your credit score by having too much debt and making late payments. You might decide to refinance your adjustable rate mortgage to a fixed rate mortgage. In case you are unfamiliar with the two mortgages mentioned below.
• An adjustable rate mortgage is a loan with a variable interest rate. This means your interest rate will change over the term of the loan. Most adjustable rate mortgages increase in interest over time, directly affecting your monthly payments and therefore your income. The biggest advantage to adjustable rate mortgages is the initial interest rate. This rate can be as low as 1%.
• A fixed rate mortgage is a loan with a fixed interest rate, and therefore steadies monthly payments. This is a great loan to have when you can obtain a decent interest rate. With the economy changing you might find the interest rate higher than it has been in years and you may not want to pay that high interest rate. This is where the adjustable rate mortgage can be an advantage. However this doesn’t detract from the overall benefits you will have from a fixed rate mortgage. With a steady interest rate you generally save money over the term of the loan.

Mortgage professionals can help get your life back on track with the options mentioned above. You may need help in determining what financial option is right for you. Fill out the form below to speak with a mortgage professional today.

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Last Updated: Sunday, May 20th 2012