Refinance FAQ
DO I HAVE TO REFINANCE WITH MY CURRENT LENDER?
You can refinance with a new lender in most cases where you are refinancing a traditional mortgage program such as FHA, VA, Conventional, or Jumbo. It doesn’t hurt to check with another bank to compare rates or fees to what your current lender may be offering.
WHAT DOCUMENTS ARE REQUIRED TO BE APPROVED FOR A REFINANCE?
The documents required for a refinance depend on the type of loan program you are refinancing. Certain Streamlined FHA or VA loan programs have limited document refinance programs. If you are increasing the loan size or pulling cash out on a refinance for debt consolidation or home improvement, you should be prepared to provide more documentation.
HOW SOON AFTER I CLOSE ON MY PURCHASE CAN I REFINANCE?
This also depends on your loan type and lender, but waiting six months is a good rule-of-thumb.
HOW MUCH MONEY CAN I GET FROM A CASH-OUT REFINANCE LOAN?
Every cash-out refinance loan scenario is unique. The amount of cash to borrower for a cash-out refinance depends on a number of factors, including but not limited to: Loan-to-Value, Credit Scores, Income / Assets, Loan Type, Loan Size, Property Type, Use, Seasoning (time in property), Residence Status, etc.
In some cases bank programs allow for loans up to 110% of the after repair value for a conventional or FHA renovation loan. Combining a first and second loan can also be consiered a cash-out refinance depending on the original use of the second mortgage.
HOW LONG DOES A REFINANCE TAKE?
A typical refinance to the rate and term only can move from start to finish in 15-20 days, especially if there is an FHA or VA streamline involved.
Besides certain minimum time frames that are regulated by the government, other things that tend to delay a refinance include appraisals, loan size, loan type, paying off other debt, discrepancies on credit reports, clear title, subordinating second mortgages, and gathering paperwork from the homeowner.
CAN I CONSOLIDATE CREDIT CARD DEBT WITH A REFINANCE?
Yes, there are debt consolidation refinance loan programs available. Equity will be a major contributing factor in determining the amount of cash that can be used to pay off credit card liabilities.
CAN I REFINANCE TO ELIMINATE MORTGAGE INSURANCE?
Depends on the type of loan. FHA has made recent changes to their mortgage insurance policy, so you’ll need to check with your lender about the type of loan and mortgage insurance premium you are trying to refinance out of. If your refinance is a conventional – Fannie Mae or Freddie Mac – loan, it will be based on loan-to-value.
It is often beneficial to refinance if you are carrying a lot of monthly debt!
- Increase monthly cash flow
- Access your equity to create an emergency fund or home improvement
- Lower Monthly mortgage payment
Increase Monthly Cash Flow
Use the equity in your home to pay off high cost consumer debt like credit cards & car loans. On average my borrowers save $400 monthly often much more every single month.
Access Equity
Refinance to take equity out in form of cash you can use to create an emergency fund and for home improvements or any other need. This will greatly improve your financial security.
Lower Monthly Payment
Obtain a lower interest rate and eliminate mortgage insurance lowering your monthly payment.
This gives you more cash in hand every month.