Refinance

Refinance

A home loan refinance is the process of obtaining a new mortgage to replace an existing one. Homeowners typically consider refinancing for various reasons, such as obtaining a better interest rate, changing the length of their loan term, consolidating debt, accessing home equity, or switching from an adjustable-rate to a fixed-rate loan.

Here are the main types of refinancing available:

  1. Rate-and-Term Refinancing: This is the most common type of refinancing. Homeowners may want to secure a lower interest rate, change the duration of their loan (e.g., from a 30-year to a 15-year mortgage), or switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa.
  2. Cash-Out Refinancing: This allows homeowners to refinance their mortgage for more than they currently owe and then take the difference in cash. This type of refinance can be useful for homeowners who want to tap into their home’s equity to cover expenses like home improvements, debt consolidation, or significant purchases.
  3. Cash-In Refinancing: Opposite of the cash-out refinancing, in cash-in refinancing, homeowners bring money to the closing table to pay down their mortgage balance. This can be advantageous for homeowners who want to get rid of private mortgage insurance (PMI), decrease the loan’s duration, or secure a lower interest rate.
  4. Streamline Refinancing: Offered by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA), streamline refinancing allows homeowners with these types of loans to refinance with fewer documentation and underwriting requirements. It is designed to lower the homeowner’s interest rate and monthly payment with minimal hassle.
  5. Home Equity Loan or Home Equity Line of Credit (HELOC): While not a direct refinance of the primary mortgage, these options allow homeowners to tap into the equity they’ve built in their homes. A home equity loan offers a lump sum at a fixed interest rate, while a HELOC works like a credit card, with a variable interest rate and the ability to draw funds as needed up to a certain limit.
  6. Short Refinance: This is a type of refinance where the lender agrees to reduce the loan amount, essentially forgiving a portion of the mortgage. This option is rare and is generally offered as an alternative to foreclosure when the homeowner owes more than the home’s current value.

When considering a refinance, it’s crucial for homeowners to factor in closing costs, the time they plan to stay in the house, and how the refinance will fit into their broader financial goals. Consulting with a mortgage professional can provide clarity on the potential costs and benefits of refinancing in specific situations.

Get rate and term refinance quotes, cash out or consolidate debt today.

Refinance Options

  • Streamline Refinance – A quick and easy option, in most cases an appraisal is not necessary.
  • Cash out Refinance – Take cash from the equity of your home to pay off high interest debt.
  • Rate and Term Refinance – Get custom rate quotes from 8 – 30 years, lower your term and pay off the house faster.
  • 203k Refinance – Refinance your existing mortgage while adding improvements to your home.

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