How can you refinance the home you love? Let us count the ways! Seven ways to be exact ... and you’ll find them all in our FREE loan comparison guide. Click on the banner to get the PDF.
People refinance their home loans for lots of reasons. To make their rate or monthly payments lower. To reduce the term of the loan and save money on interest. To pay off higher interest debts or get cash for big expenses like home renovations and tuition.
Regardless of your reasons, our refi comparison guide explains the benefits and requirements of each loan type, and looks at situations when you might choose them. Let’s check out the benefits our 7 options to give you a taste of the advice in this outstanding resource.
The Fixed Rate loan gives you a low interest rate that doesn’t change. That means you pay the same amount every month, making it easier to budget and control your finances. You can get terms ranging from 10 to 30 years. And you can cash out with as little as 20% equity.
The Adjustable Rate loan features lower rates and payments during the initial term (that is, the “beginning of the life”) of the loan. Monthly payments also stay the same during the initial term. There are caps on how much your interest rate can rise later.
A FHA Loan has lower interest rates than conventional loans, though you may need to pay monthly mortgage insurance (varies based on loan amount, length of loan, and initial loan-to-value ratio). You can refinance these home loans with as little as 2.25% equity and cash out with as little as 15% equity.
To get a FHA Streamline Refinance, your current mortgage needs to be a FHA loan. This option gives you lower interest rates than conventional loans, though you may need to pay monthly mortgage insurance (varies based on loan amount, length of loan, and initial loan-to-value ratio). There are reduce credit requirements. You don’t need to get your house appraised. And the process is faster.
To get a VA Loan, you need to have served in the military. (Some surviving spouses qualify too.) VA loans have lots of benefits. They have lower interest than conventional loans. You can get both fixed rate and adjustable rate mortgages. You don’t need to buy mortgage insurance. You can refinance cash-out or non-cash-out with a loan-to-value (LTV) ratio of 100%. And other people can assume the mortgage.
You need to have an existing VA loan to get a VA Streamline Refinance. These loans feature lower rates, no minimum credit score, no appraisal, and a quicker process.
To qualify for HARP ("Home Affordable Refinance Program"), your loan must be owned or guaranteed by Fannie Mae or Freddie Mac and you need to meet certain other requirements. HARP loans feature lower monthly payments or interest rates.
There are no underwater limits. Homeowners are said to be “underwater” when they owe more on their loan than the current market value of their house. There is no appraisal or underwriting, no minimum credit score, and no mortgage insurance required. HARP is set to expire in December 2018.
With any home loan refinance, you’ll want to understand things like your credit score and how it can impact what you might be offered. Your debt-to-income ratio matters. You’ll want to know how much your closing costs will be and what your loan-to-value ratio is too.
Learn about the requirements for these 7 choices in our Refinancing? Compare Your Loan Options guide. Download your free copy now!