Can You Benefit from a 15-Year Fixed Jumbo Refinance?

Published March 26, 2022
Jumbo loans are different from conventional and conforming mortgages, which means a 15-year fixed jumbo refinance is a distinct process. Knowing all the potential benefits and disadvantages is essential if you want to refinance your jumbo loan. We're here to help at every step of the way, so be sure to reach out with any lingering questions or to take the next steps for your refinance.
Why refinance your 15-year jumbo loan?
The benefits of a 15-year fixed jumbo refinance include lower interest rates, lower monthly payments, and/or access to home equity, depending on your current mortgage payment status. In addition, if you're considering a refinance years after closing on your initial loan, you may even be able to refinance into a conventional mortgage. To help provide a better idea of what a 15-year fixed jumbo refinance can do for you, check out specific refinancing outcomes below.
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Lower your interest rate: You may be able to refinance your mortgage into a lower interest rate than when you took out the jumbo loan. Jumbo loans can carry higher interest rates, so a lower fixed rate can help you save tens of thousands of dollars over the loan's life.
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Adjust your loan term: Refinancing your jumbo loan allows you to change the loan term. A shorter term will enable you to pay off your loan quicker with higher monthly payments but lower interest. Homeowners pay more money toward their principal balance, which leads to a quick accumulation of equity. Conversely, a longer-term makes your monthly payments smaller, but you pay more interest.
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Take cash out of your home: A cash-out refinance benefits homeowners looking to tap into their home equity to cover expenses, such as home improvement projects or debt payments. Jumbo loans face more restrictions on the limits of a cash-out refinance, so work with us to better understand whether you qualify for this type of refinance.
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Refinance into conventional loan: With a 15-year fixed jumbo refinance, you may be able to structure your loan term to refinance into a conventional loan. This can provide access to better interest rates.
The benefits of a 15-year fixed jumbo refinance
If you qualify for a refinance, you can unlock significant benefits from a jumbo loan refinance. This financial move can help you grow equity fast, modify your interest structure, and help you own your home outright sooner. Read more about each benefit of a 15-year fixed jumbo refinance below.
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Grow equity fast: By refinancing your jumbo loan, you can pay off more of your mortgage and increase your equity more quickly. Increasing your equity gives you spending flexibility. With more equity from a refinance, you can buy more property or continue to improve your home.
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Modify interest structure: Some homeowners may currently have an adjustable-rate on their jumbo home loans. Refinancing can shift your loan into a fixed-rate financial tool. Compared to an adjustable-rate loan, a fixed jumbo loan keeps your monthly payments consistent and locks in a single interest rate. If you want to adjust your interest structure, a refinance can make that possible.
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Own your home outright sooner: Some homeowners may be eager to pay off their mortgage faster than their current loan term. Even though you will have to increase the amount of your monthly payments, a jumbo loan will shorten the loan term so you can pay off the mortgage sooner.
Possible disadvantages of refinancing your jumbo loan
A 15-year fixed refinance isn't for everyone. If you're considering this move, here are some potential pitfalls to consider. If you're not sure whether the benefits outweigh the disadvantages for your particular home loan, get in touch. We're happy to help.
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The refinancing process: Jumbo home loans have stricter application requirements. These restrictions can result in a longer refinancing process. During this process, you should expect to provide several forms of documentation on cash reserves and debt-to-income ratio. This will help assess your ability to refinance.
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Higher interest over time: Depending on how you refinance, you may end up paying higher interest over time due to the length and interest rate of your loan. When you think about refinancing, be sure to consider current 15-year fixed jumbo refinance rates to get a sense of what you should expect to pay.
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Limited cash-out refinancing: While a cash-out refinance of your jumbo loan allows you to take some cash out, you won't be able to take out all of your equity. This is a potential drawback if you want to use home equity via a cash-out refinance for other significant financial investments.
When should you consider a 15-year fixed jumbo refinance?
There is no standard timeline for homeowners to refinance their jumbo loan, and it's impossible to predict when rates will be at their lowest. However, if you notice mortgage rates staying consistently low, if your finances are changing, or if you want to take cash out of your home, you may be in a good situation to refinance your jumbo loan.
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Falling mortgage rates: Consider refinancing when you notice that mortgage rates are consistently lower than your current rate. Even a slight decrease in interest rates can result in significant savings.
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Financial changes: If you gain more in monthly income and are motivated to pay off your mortgage quickly, consider refinancing into a shorter loan term. A shorter loan means higher monthly payments, but you will own your home outright sooner.
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Cash-out refinance: You may be seeking a refinance in order to take cash out against your home to go towards home improvement projects, fund a child's education, or pay off other debt. When you have built enough equity in your home, a refinance can help you tap into that cash.
Contact us to discuss your 15-year fixed jumbo refinance options.
We're here to help you understand your options for a refinance on your jumbo loan. Together, we can review current 15-year fixed jumbo refinance rates and see how a refinance can benefit your specific mortgage. A jumbo loan refinance can give homeowners more financial flexibility and help save money. Contact us at any time with questions about your jumbo loan or your jumbo loan refinance.