Refinancing Your Mortgage

Refinancing is simply replacing your current mortgage with a new one. You can use it to lower your rate, change your term, pull cash out of your equity, or cleanly restructure who is on the loan and title. You can also refinance into a renovation loan for repairs or additions! The basic credit score and income rules are the same as the purchase versions of each program, so you can always click over to our FHA, VA, USDA, conventional, non QM, and HELOC pages for more detail. You can refinance to and from different loan programs as well. So you can go FHA to Conventional and drop mortgage insurance etc.

Fast facts

Types of refinance:

• Rate and term refinance
• Cash out refinance

Programs available

• Conventional, FHA, VA, USDA to USDA, and many of our non QM products

Rate and term refinance:

• Main goal is to lower your interest rate, your payment, change your term, or all three
• You can usually get only a small amount of cash back at closing, generally around 500 dollars to about 1 percent of the loan amount, depending on the program
• Often allows a higher loan to value than cash out options

Cash out refinance:

• Designed to pull equity out for debt payoff, remodels, paying out other owners of the property, or other goals
• Commonly used to settle divorces, buy out a co owner, or release someone from title while restructuring the financing on the home. For certain situations divorces can be priced as a rate and term refinance though, which is a little cheaper.
• Usually goes up to about 80 percent of your home value, depending on program and credit profile. VA goes higher than this by a ways though
• Rates are normally a bit higher than a rate and term refinance
• Best when you want to reduce your monthly payment, move from an ARM to a fixed rate, or shorten your payoff timeline.
• We compare multiple programs side by side so you see the total cost, not just the rate.

Best fit for you if

• You bought when rates were higher and want to see if a lower payment or shorter term makes sense
• You want to consolidate debt into one mortgage payment
• You want to use equity as a down payment on your next property
• You need to buy out a co owner, settle a divorce, or remove someone from the loan and title in a clean, documented way
• You have a VA, FHA, USDA, non QM, or conventional loan and want to compare all your refinance options in one place and see if switching programs makes more sense

Big perks

• Rate and term refinances focus on improving your situation rather than pulling a lot of cash out
• Cash out refinances can free up equity for projects, debt payoff, buying out other owners, or planning your next purchase
• You can clean up ownership and title while you refinance, so everyone’s share and responsibility is clear in the new loan
• VA borrowers have extra options:
• VA cash out refinances
• Non VA to VA refinances if you have entitlement but are in a different type of loan now
• VA to VA rate and term refinances
• Special IRRRL refinances, often called EARL, which are streamlined VA to VA refinances with limited paperwork, no full income underwriting, and a lower funding fee that focus on dropping your interest rate

Keep in mind

• USDA refinances must stay USDA. You need to already have a USDA loan to do a USDA refinance
• VA refinance options depend on whether you are going from non VA to VA, VA to VA with cash out, or VA to VA using the streamlined IRRRL path
• Credit score, income, and debt to income rules mostly match the purchase versions of each loan program, so the same strengths and limits apply