Refinance
Looking to make changes to your current loan?
We got your back
Do you want to take cash out, consolidate debt, lower your interst rate, or change loan terms? Let us help you explore your options.
Types of Refinances
Refinancing is the process of replacing an existing loan with a new one, usually to obtain better terms. This can involve lower interest rates, reduced monthly payments, or changing the loan duration. Here are some common types of refinancing:
1. Rate-and-Term Refinance
Purpose: To change the interest rate or loan term without taking out additional cash.
Benefits: Often leads to lower monthly payments or a shorter loan term, which can save money on interest over time.
2. Cash-Out Refinance
Purpose: To borrow more than the existing mortgage balance and take the difference in cash.
Benefits: Useful for funding home improvements, paying off high-interest debt, or covering significant expenses. However, it increases the overall loan amount.
3. Cash-In Refinance
Purpose: To pay down the mortgage balance by making a large payment during refinancing.
Benefits: Reduces the loan amount, potentially lowers monthly payments, and can help achieve better loan terms or eliminate private mortgage insurance (PMI).
4. Streamline Refinance
Purpose: Designed for certain government-backed loans (like FHA or VA loans) to simplify the refinancing process.
Benefits: Typically requires less documentation, lower credit score requirements, and often no appraisal is needed, making it faster and cheaper.
5. FHA and VA Refinances
FHA Refinance: Offers flexible credit requirements and lower down payment options. Includes both cash-out and streamline options.
VA Refinance: Available to veterans and active military, includes options like the Interest Rate Reduction Refinance Loan (IRRRL) which simplifies the process.
6. Hybrid Adjustable-Rate Mortgage (ARM) Refinance
Purpose: Replacing a fixed-rate mortgage with an ARM, or vice versa.
Benefits: May offer a lower initial rate, but involves the risk of rate adjustments after a fixed period.
What's the Refinance Process Like?
Though each situation is unique, check out the typical flow of a loan from research to funding.
Inquiry
Research & Initial Call
You decide you want to refinance. The options are endless! A brief call with us can help us understand what you need and help you narrow down what you qualify for.
Credit Check
Depending on the loan, a credit check may be required to ensure you qualify.
Application
Complete Application
You complete an official application and the real timeline starts.
Gather Documentation
We'll request some initial documentation, such as ID, proof of assets, proof of employment, approximate payoff amount, etc.
Initial Underwriting Review
We submit your loan and preliminary documents to underwriting to be reviewed.
Underwriting
Conditional Approval
After reviewing initial documents, underwriter issues conditional approval and lists the conditions/documents still needed. We'll then request the additional documentation from you or any other responsible parties.
3rd Parties: Title, Appraisal, Insurance
If needed, we'll request a title report, order an appraisal, and ensure insurance is in place or updated.
Clear to Close
Once all requested documenation is in and all conditions are satisfied, the UW will issue Clear to Close! This means we have the green light.
Closing
Closing
Once clear to close is issued, we'll schedule the time/date of closing, at which you will sign the loan documents.
Funding
Once all closing docs are received and in order, the funds for the loan will be wired from the lender. Ta da! You got your loan!
Frequently Asked Questions
Have a question not listed? Check out our Learn page or reach out to us with one of the options below!
How does a refinance work?
In essence, you are taking out a new loan that will be used to pay off your current loan. This can be in order to change loan terms, remove or add someone to the mortgage, get a better rate and reduce overall interest, or take out additional funds to consolidate debt, make home improvements, etc.
Why use a broker rather than a lender directly?
While lenders are locked into one set of rates and guidelines, a mortgage broker can compare options across multiple lenders, ensuring you get the best rate and deal for your needs.
Not often known, brokers also get wholesale pricing, which means they can even get you a lower rate from the same lender than you would get going to the lender directly!
We originate and process the loan directly, and the lender handles the UW, closing and funding of the loan.
What credit score do I need?
Certainly a higher score puts you in a better position to receive a better rate and terms from lenders, but most conventional loans can go as low as 620 and FHA and VA loans can be seen as low as 550 (lower in some scenarios).
Do I need to pay closing costs when refinancing?
Usually, most closing costs can be "rolled into the loan" in a refinance. This means that you do not need to pay for them out of pocket but can include them in the new loan amount.
Contact us today!
We are happy to answer any questions you may have regarding mortgage loans and provide you with competitive rates tailored to your unique financial situation.
