Posted on: 30th Mar, 2004 03:55 am
Most people choose to refinance either to get a lower rate compared to what they have received on their existing mortgage or to modify the term of the loan. Besides, they often require extra cash for a variety of purposes and here's where refinance can help them to cash out their equity. This article gives you an idea of the following aspects of refinance:
Now that you're aware of the different ways by which you can refinance your current loan, you need to decide upon the loan program that can fulfill your purpose of refinancing and help you save the maximum.
It's better if you can shop around and apply for mortgage quotes with a number of lenders. This will make you aware of the rates and trends prevailing in the market. It will give you an idea on what the mortgage rates are likely to be in the forthcoming days. You can then go for the right loan program keeping in mind your needs as well as what the market trends are likely to be in the near future.
- 5 ways to refinance your existing loan
- Loan types to choose for refinance
5 Ways to refinance your loan
- Rate and Term Refinancing
This allows you to borrow enough to clear your current mortgage balance. You can either modify the interest rate on your loan or change the loan term or you may adjust both. For instance, you may change to an FRM when the rate on your ARM is expected to move upwards within a short time. Or else, you may switch over from an FRM to a hybrid ARM if you plan to move out within a period of 2 to 3 years. - Cash-out Refinancing
This is one of the home refinancing options which will leave you with excess cash amount after you have paid off the current loan balance. You can thus extract cash proceeds from your home equity. Know more... - Streamline refinancing
Streamline refinancing refers to the documentation and underwriting carried out by a lender in order to find out if the borrower would qualify for a refinance loan. This is a kind of loan program does not require any credit verification. But it may or may not require an appraisal. There are two types of streamline refinances - one offered by the FHA and the other by the VA. Know more... - Mobile home refinance
You can avail mobile home refinancing loans in case you wish to in order to get a lower interest rate on your mobile home mortgage loan and enjoy making some savings out of it. You can opt for a Title I loan program provided the mobile home is your primary residence. There are some criteria which you need to fulfill in order to get a mobile home refinance loan. Know more about the eligibility criteria. - Low Credit Refinance
You may have a number of loans including credit cards, personal loan or even a mortgage and are not able to pay them off in the right time. This is when your credit score starts going down and now if you look forward to a refinance, you may be perceived as a low credit borrower.
However, inspite of low/bad credit, it is possible to qualify for a mortgage. But there are lenders who may require you to pay a higher rate of interest on the refinance loan compared to what you had to pay had your credit score been a favorable one. However, bad credit loans provide you with an option to rebuild your credit while you make regular payments on the refinance loan. At times, you do need these loans in order to consolidate and eliminate other debts, provided you take out extra cash through the refinance - the process being known as cash-out refinance. Know more on Bad credit refinance.
Now that you're aware of the different ways by which you can refinance your current loan, you need to decide upon the loan program that can fulfill your purpose of refinancing and help you save the maximum.
Loan types to choose for refinance
There are various loan options available in the market. You need to choose from the options depending upon your finances and the situation you are in. We have given a list of the situations and the loan options one may go for if he wishes to refinance.
| Your Situation | Favorable Loan programs | |
| Require cash | Home equity loan | |
| Home improvement | Home equity loan/Line of credit | |
| Need loan amount below $300,700 | Conforming fixed rate loan | |
| Need above $300,700 | Jumbo fixed rate loan | |
| Plan to stay beyond 5 years | Fixed rate loan | |
| Wish to sell within 5 years | Adjustable rate of mortgage | |
| Add a room or other improvements at home | Cash-out refinance | |
| Buying a vacation home | 30 year fixed rate |
It's better if you can shop around and apply for mortgage quotes with a number of lenders. This will make you aware of the rates and trends prevailing in the market. It will give you an idea on what the mortgage rates are likely to be in the forthcoming days. You can then go for the right loan program keeping in mind your needs as well as what the market trends are likely to be in the near future.
Related Readings
Hi Guest,
You should check out whether or not the property has equity in it. If there is equity in your property, then you can contact your lender and apply for a mortgage refinance. As the rates are going low, you'll be able to get a lower interest rate in order to pay off your mortgage once you refinance the loan. However, if you don't have equity in your property, you won't get a mortgage.
You should check out whether or not the property has equity in it. If there is equity in your property, then you can contact your lender and apply for a mortgage refinance. As the rates are going low, you'll be able to get a lower interest rate in order to pay off your mortgage once you refinance the loan. However, if you don't have equity in your property, you won't get a mortgage.
Im almost done with my divorce and my husband will give me the house but the loan is also under both name I called my bank and they said they cant refinance because of the equity what else I can do to take him out of the loan?
please help me
please help me
Is it posible to get financing on a twenty two year mobile home thru a va loan?
Welcome Melody,
Mobile homes which were build prior to 1976 do not qualify for loans. If your mobile home was build after that and if it has equity in it, then you'll be able to get a mortgage refinance.
Mobile homes which were build prior to 1976 do not qualify for loans. If your mobile home was build after that and if it has equity in it, then you'll be able to get a mortgage refinance.
My credit is not so good due to credit cards I defaulted on, because I got a 2 way pay cut at work and could not afford to pay. I want to rebuild my credit. Is it possible for me to refinance my home, that I've been living in for 15 years to pay off the credit card debt that I owe and also receive some cash back?
Hi Tracey,
If you don't have a good credit, then you won't be able to refinance your mortgage. Moreover, you should have equity in your property and a good income in order to get a mortgage refinance. Unless you meet these criteria, you won't be able to get a mortgage refinance.
If you don't have a good credit, then you won't be able to refinance your mortgage. Moreover, you should have equity in your property and a good income in order to get a mortgage refinance. Unless you meet these criteria, you won't be able to get a mortgage refinance.
is there anything available to refinance if the current value is less than the existing mortgage?
Hi Guest!
Welcome to forums!
If there is no equity in the property, none of the lender's will help you in getting a mortgage refinance.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If there is no equity in the property, none of the lender's will help you in getting a mortgage refinance.
Feel free to ask if you've further queries.
Sussane
If we are able to pay a large amount of money toward the principle of our mortgage (as in more than $50,000) how would we go about re-financing the amount owed so we can lower our future monthly note?
Welcome BWilliams,
Once you have equity in your property, you can apply for a refinance in order to lower the interest rates. However, in order to refinance the existing mortgage, you should have good credit scores and stable income.
Once you have equity in your property, you can apply for a refinance in order to lower the interest rates. However, in order to refinance the existing mortgage, you should have good credit scores and stable income.
how flexible are lenders today with regards to establishing equity?
Hi riseabove!
Welcome to forums!
Your query is not clear. It is the borrower who needs to pay off the mortgage in order to build equity in the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Your query is not clear. It is the borrower who needs to pay off the mortgage in order to build equity in the property.
Feel free to ask if you've further queries.
Sussane
I purchased a home 7yrs ago with 1 acer of property. I now have an oppertunity to purchase an additional 7 acers attached to my property. Is there refinance option where I can bundle the new property with my existing mortgage. Thanks
Hi Young!
Welcome to forums!
This is something which you need to clarify with your lender. As far as I can understand, if you meet the required criteria of the lender, you will be able to get a refinance.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
This is something which you need to clarify with your lender. As far as I can understand, if you meet the required criteria of the lender, you will be able to get a refinance.
Feel free to ask if you've further queries.
Sussane