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III. Exploring Your Refinance Options



If you want your monthly budget to be flexible, you should check out some of the ways you can bring down your mortgage payments.

If your aim is to get the lowest interest rate, you should think about getting an adjustable rate mortgage (ARM). These are generally lower than the fixed rates since there is a risk that the rate may increase after the initial fixed-rate period is over. An ARM could be perfect for you if you’re thinking to refinance or move in the next 5 to 10 years.

You should know that even if you refinance with a low-interest rate, there’s no guarantee that your payments are going to be low as well. Getting a lower rate will decrease the interest on your monthly payments, but other factors, like your insurance, term, and taxes influence the amount you’ll be paying at the end of the month.

Changing your mortgage term would be the best option for you if you’re interested in having a lower payment instead of quickly paying off the loan. When you increase the length of your mortgage term you can stretch out the payments, which will mean smaller payments. For instance, going from a 15-Year term to a 30-Year term will lower your payments.

You’ll need to pay PMI, which is a fee that’s added to your monthly mortgage payment if you have less than 20% equity when you’re refinancing or less than 20% for your down payment. Your monthly payment amounts may increase by hundreds of dollars because of a PMI.

A lot of people don’t have the means to afford a 20% down payment, which is why PMI is very common. That’s the reason why Iconic Mortgage Corp helps clients with conventional loans by providing them with options to eliminate or reduce their PMI payments. If you’re looking for the lowest monthly mortgage payments, the best thing for you could be by checking out our PMI Advantage program.

PMI Advantage works in two ways, which are:

  • We can increase your interest slightly to cover the cost of PMI, instead of paying PMI as a part of your monthly mortgage payments.
  • You can also pay PMI as a one-time payment at closing, and that’s a great option if the seller agrees to cover the costs.

You’ll end up saving money and getting a lower monthly mortgage payment, whichever way you choose.


If you’re looking to take cash out there are several options you can choose from, which depend on your goals and situations. If you’re looking to take out a lot of cash, your best option would be a 30-Year loan. This is because the 30-Year term is going to have the lowest monthly payments when you’re increasing your loan amount by taking cash out.

A shorter term would be the better choice if you’re taking cash out to become debt-free, and you can use the cash to pay off your debt and credit cards while saving on interest and paying off your home. Your personal situation will play a role in whether you choose an FHA loan or a conventional loan, and most homeowners tend to find an FHA loan to be more affordable than a conventional loan.

However, if you’ve already got a conventional loan, then the best choice would be to refinance into another conventional loan. Your lender will also help you decide which loan option offers you the best way to take cash out.


One of the best ways to pay off your home in a quick and affordable manner is by shortening your term, as you get lower interest rates with a shorter term. There will also be fewer payments and you’ll be paying less interest overall. There are several choices available to you for shortening your term, and choosing one depends on your situation.

Those with good credit should go with a conventional loan, but if you’re a veteran or service member the VA loan will be the best option. You can discuss what are the best loan options with your lender to understand which loan option offers the most affordable way to shorten your term.

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