WHAT TO KNOW
REFINANCE
REASONS TO REFINANCE
Lower Monthly Payment
You may be eligible to reduce your monthly payment by refinancing. You can refinance into a lower interest rate or remove monthly mortgage insurance if your loan qualifies.
Change Your Term
Refinance your loan to shorten or lengthen your term. Depending on your financial goals there are options that may benefit you.
Move from Adjustable to a Fixed Rate Mortgage
If you believe interest rates may be on the rise and you are in adjustable rate mortgage it may be time to refinance your loan into a fixed rate mortgage.
Consolidate Combo Mortgages
Depending how long you have had your existing mortgage, you may be able to combine your first, second or HELOC into one
mortgage payment.
Debt Consolidation
Consolidate multiple monthly payments into one easy low payment. Credit cards often carry high interest rates and the interest on your mortgage is usually tax deductible. You can also pay off other debts such as car payments, wedding debt or student loans to reduce your overall monthly expenses.
Home Repair and Renovations
Use the equity in your home to complete home repairs, expansions or renovations while also increasing the value of your home.
Remove someone from a loan
If you and your partner or co-borrower need to be removed off a current mortgage you will need to refinance the existing loan into the name of the person who will remain responsible for the mortgage.
TYPES OF REFINANCING
FHA STREAMLINE
If you have an existing FHA loan you may be eligible for an FHA streamline refinance
BENEFITS:
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No requirement for income verification
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Reduced paperwork compared to a regular refinance
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Monthly payment is lowered
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In most cases, you can refinance without an appraisal
VA STREAMLINE
Also known as IRRRL this type of refinance is available if you are currently in a VA loan.
BENEFITS:
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No paystubs, W2 or bank statements required
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No appraisal
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Homes underwater are eligible
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Funding fee is lower than on VA purchases
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Closing costs can be wrapped into the loan amount leaving
little out of pocket expense.
ARE YOU ELIGIBLE TO REFINANCE?
Here are some of the items your lender may consider when you apply for a refinance.
Income – Generally two years of income with no gaps. Income from multiple sources can be considered such as primary, second, or part -time employment. Advise of any commission or bonus income that may be utilized as well.
Assets - The lender may require you to show that you have additional funds set aside to cover closing costs or several months of PITI. (Principal, Interest, Taxes and Insurance). Your loan officer can discuss this with you to determine what may be needed.
Credit Score - Your credit score and payment history will be considered with a refinance. Have you made your monthly mortgage payment on time in the last 12 months? Do you have any current liabilities with late payments or accounts in collection in the last 12 months? This may affect your ability to refinance.
Current Debts - During your credit review the lender will consider your current monthly obligations in addition to the new estimated monthly mortgage payment. Your agent will then use this to verify your debt-to-income ratio and verify it meets lender guidelines. If you have recently paid off any debts or added any new lines of credit, you will want to discuss this with your loan officer.
Current Value of your property - The lender will order an appraisal during your refinance to determine your current property value. You may want to research recent sales for similar homes in your area to determine if your home has enough equity before applying.
Amount of money you would like to borrow - Depending on the value of your home will determine how much money you can borrow. There are multiple programs with various loan-to-value ratios, so speak to your loan officer to determine what program best fits your need.