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When should you consider refinancing your home? First, let’s talk about options and reason’s why this might be your solution. Our most popular options are the VA IRRRL, the Cash-out, and the Rate Term. Read on to learn more about the differences.
Cash Out
If you have equity in the home and would like to take some of that out to make some repairs, pay off some debts, etc. this is a great option. This starts a whole new loan so all terms are updated with this one, including the time left on the loan.
If you have a VA loan, you can take out up to 100% of the equity. If you have a conventional loan, you can take about 85%. This is a great way to pay off old debts that may have higher interest rates, such as your car, credit cards, medical, student loans, etc.
Regular Rate Term Refinance
This is a great option when the rates are generally better or you want to change the loan program, and/or lower or remove MIP. If the rates have dropped and it’s been 2 years since your first payment, you should consider refinancing. This can save thousands on your overall mortgage.
If you have a conventional loan with MIP, you can refinance out of it once your LTV hits 80%. You just have to contact your servicer and possibly do an appraisal to confirm the value and remove it. If you have an FHA with MIP, you can refinance into a conventional loan if you have 3.5% down. After 2 years, you can determine with an appraisal if the LTV has reached 80% and opt to remove the MIP.
There are many great opportunities when it comes to refinancing your home. Call our expert loan officers today to find out how to get started.
VA IRRRL – Interest Rate Reduction Refinancing Loan
If you already have a VA loan, then this could be your answer. If you are looking to lower rate to meet current rate trends then this is a great option. There are only a few qualifying boxes to check and very few documents to provide.
Keep in mind, there is a seasoning period in which you have to have had the current loan for 210 days from the first payment due date. After that, the VA has already qualified you so you don’t have to provide much else. If you are not exempt, there is a funding fee of .5%. Definitely contact our Loan Officer’s for more info today.