Mortgage Refinancing
Optimize your financial position by locking in a lower rate, changing your loan term, or unlocking your home's equity.
Types of Refinancing
Rate-and-Term Refinance
The most common type. You replace your current mortgage with a new one that has a lower interest rate, a different term length (e.g., switching from a 30-year to a 15-year), or both. Your loan balance stays roughly the same.
Cash-Out Refinance
Tap into the equity you've built up in your home. You take out a new loan for more than you currently owe, paying off the old mortgage and pocketing the difference in cash for renovations, debt consolidation, or investments.
Streamline Refinance
Exclusive to FHA, VA, and USDA loans. It allows you to refinance an existing government-backed loan with reduced paperwork, no appraisal, and minimal credit checks, designed strictly to lower your monthly payment.
When Does Refinancing Make Sense?
Refinancing isn't free. It typically costs between 2% to 6% of the loan amount in closing costs. The golden rule is calculating your break-even point. Divide your total closing costs by your monthly savings. If it takes you 36 months to recoup the costs, and you plan to stay in the home for 5 years, refinancing makes excellent financial sense.
The Refinance Process
- Assess Your Equity & Credit: Ensure you have at least 20% equity to avoid PMI, and a strong credit score to qualify for the best rates.
- Shop Lenders: Don't just stay with your current servicer. Get quotes from multiple lenders.
- Lock Your Rate: Once you find favorable terms, lock the rate to protect yourself from market fluctuations during underwriting.
- Appraisal & Underwriting: The lender will appraise your home's current value and verify your income documents.
- Close: Sign the final paperwork and pay closing costs (or roll them into the new loan balance).
Explore Your Refinance Options
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