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Getting Started With Refinancing

When considering refinancing, the first step is to identify your goals.

Do you just want a lower monthly payment or do you want to get cash in exchange for some of the equity you have built up in your home? The cash-out option is generally used for home improvements or to pay off credit card debt. Once you have identified why you are refinancing your home, learn more about the different refinance options that will successfully meet your needs. Below is a breakdown of each refinance option and few general highlights. There are exceptions to each option so please consult with one of our loan officers when selecting the right refinance choice for you.

Conventional Refinance

If your mortgage is backed by Fannie Mae or Freddie Mac, it is a “conventional” loan. Refinancing a conventional loan is a common refinance option. Typically, a conventional refinance includes:
  • An appraisal on your property is required
  • Full employment and income verification is required
  • Employment history of two years
  • Minimum Credit Score of 620
  • 95% loan-to-value (LTV) with mortgage insurance required, 80% LTV without
  • Lender credit allowed to cover closing costs
  • It is common to move from a 30 to a 15 year fixed term

FHA Streamline Refinance

The FHA Streamline is for people who currently have a Federal Housing Administration (FHA) loan and want to lower their monthly payments. General highlights of the FHA Streamline are:
  • No appraisal on your property is required
  • No income verification
  • Low fixed rates
  • Lender credit allowed to cover closing costs

VA Streamline Refinance

The VA refinance is a popular program for veterans or active military personnel who currently have a VA loan. Similar to the FHA Streamline, the VA streamline is for people who want to lower their mortgage payment without getting cash out.  Some of the typical details behind a VA refinance include:
  • No appraisal required
  • No income verifications
  • No Credit score verification by HUD, but some circumstances may require a minimum credit score
  • Low fixed rates
  • Reduced funding fee requirement
  • Lender Credit allowed to cover closing costs

Cash-Out Refinance

For those that want to convert your home equity to cash, there are programs called “cash-out refinance” programs. Conventional, FHA, and VA loans all have different cash-out requirements, so check with one of our mortgage experts depending on your loan. In general, here are aspects you can expect:
  • Appraisal required
  • Full income and employment verification
  • 85% loan-to-value for FHA; 80% for conventional; 100% for VA
  • Lender credit allowed to cover closing costs
Refinance - Getting StartedWhether you want to get cash out of your home or just reduce your monthly payment, with rates at historic lows, it often makes sense to refinance. Apply Now to start the refinancing process and one of our trusted loan officers will work with you to determine the best loan option for you. We look forward to showing you how committed we are to putting people first.
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