If you are entering the refinance world for the first time (or even the second) it can be a bit daunting; like navigating an ocean without the stars, so let’s take a look at some of the options open to you. Sit back, relax, and let Refinancey be your North Star.
What Can a Refinance Do for You?
If you’ve had a mortgage then you will know that it can greatly increase your credit score, which in turn makes you eligible for a refinance. That eligibility can be a great boon to your pocketbook in many ways, one of which is reducing the interest rate on your mortgage. A lower rate means more of your money is paying down the principal amount rather than the interest. It can also lower your monthly payment and shorten the term of your loan! If you are looking into refinancing your mortgage, there are few prerequisites to discuss.
An FHA streamline refinance is a quick way to lower your monthly payment and bypass some of the documentation.
For those of you that live out in the middle of nowhere, don’t worry, a USDA streamline may be able to help you refinance your home.
A conventional loan is one of the most common loans. Although you do have to pay a higher down payment, you can weed through a lot of additional fees if you decide to cash out later.
If you have built up a fairly good amount of equity in your primary resident and you are over the age of 62, a reverse mortgage may be something you want to look into.
A fixed rate gives you a peace of mind knowing that your mortgage is going to stay the same for a long time. This is great for those who like to stick with the exact budget every month.
The ARM program is great for those who are going to be selling their home soon. It can also be a very good option for those who are trying to pay off their mortgage in a short amount of time.
With a cash-out refinance you can use the equity in your home for other needs such as auto loans, credit card debt and medical bills. In some cases, people use the money to go on their dream vacation.
The VA – IRRRL is a refinance program that has been put in place for our veterans. This program gives our honorable men a sense of relief when it comes to their mortgage.
If you make a considerable amount of money but still need a little help getting into your luxury dream home, a jumbo loan is going to be one of your best options.
If you are drowning in your mortgage, you might want to look into the HARP. This program has helped a lot of homeowners from their underwater mortgage.
Investing your money is a great way to gain equity for yourself. Investment loan refinance can help you get the best out of your assets.
Remodeling can be a great way to add value to your home. If the home needs major improvements, a 203k renovation loan may be what your home needs to feel like new again.
What Are Your Needs?
While going over your refinance options, it is best to ask yourself “what do I need to get out of a refinance?” If you need a lump sum of cash to pay off a car loan or a student debt, then the cash-out refinance would be best for you. This essentially means that you are cashing out the equity in your home. If however, you are currently insured by FHA and want to reduce your interest rate, the FHA streamline is a great way to go. The FHA streamline refinance is quick and easy, with little paperwork to shuffle through. The USDA streamline refinance mirrors the FHA streamline in many ways and does not require a credit report or an appraisal on your home. Many find this type of refinance suits their needs the best because their credit score is low, and because they are underwater with their equity.
What Can You Qualify For?
Once you’ve determined your needs it’s also a good idea to look at your qualifications. Do you have a great credit score? Have you kept up with your mortgage payments? Are you a veteran? If you answered yes to any of these questions, there is a refinance option for you. Veterans are offered the choice of an Interest Rate Reduction Refinancing Loan or IRRRL. You may also know it as a VA refinance, and it can be done with no money out of pocket because all costs are included in the new loan.
The market has taken homeowners for a wild ride; home values have declined as much as 50% of their initial value. If you are a homeowner who is paying a mortgage for a home that is worth far less than its initial appraisal value, you can look into the Home Affordable Refinance Program. Granted that you stayed current on your mortgage payments, the HARP allows you to renegotiate the terms of your mortgage by refinancing with the adjusted value of your home. This means lower monthly payments and a lower mortgage balance. It’s definitely a win for many homeowners.
Still Haven’t Found What You’re Looking For?
U2 may have coined the term, but a lot of perspective refinance customers know full well the extent of the lyrics “still haven’t found what I’m looking for” (it’s OK to hum now). There are many options available to suit the needs, wants and wishes of each mortgagee; you just need to look around. For starters, there is the Adjusted Rate refinance, the Fixed Rate refinance, Investment Loans, Renovations Loans, Jumbo’s and Reverse Mortgages…just to name a few. Don’t be discouraged if you have to search a bit more for the perfect fit. Refinancey is here to be your guiding star, and we have all the information you need to set you on the correct path.