Need refinancing options on a home, or other real estate? Choosing a refinance product that matches your goals and making sure you get the best rate for your given scenario can feel like playing whack-a-mole.
We’re here to make the home refinance process a whole lot easier, with tools and expertise that will help guide you along the way, starting with a FREE refinance analysis request.
We’ll help you clearly see differences between loan programs, allowing you to choose the right one for you whether this is your first refinance or 7th.
A cash-out refinance is a powerful financial tool that allows homeowners to tap into the equity they’ve built in their property—providing access to cash while replacing their current mortgage with a new one. Here’s a clear breakdown of how the process works:
You currently have a mortgage on your home, and over time you’ve reduced the balance through your regular monthly payments. This ongoing repayment builds ownership in your property.
Equity is the portion of your home you truly “own.”
You build equity in two key ways:
The more equity you have, the more financial flexibility a cash-out refinance can provide.
With a cash-out refinance, you replace your existing mortgage with a new, larger loan.
The new loan:
This new loan is structured with updated terms—often with a new rate, loan length, and monthly payment.
The “cash-out” refers to the funds you receive above the amount needed to pay off your previous loan.
Homeowners use this cash for a variety of purposes, such as:
It’s your equity—so you choose how to put it to work.
Because you’re obtaining a brand-new mortgage, you’ll receive:
In many cases, homeowners use a cash-out refinance to secure better loan terms while also gaining access to cash.
A cash-out refinance allows you to convert a portion of your home’s equity into usable cash—while resetting your mortgage with new, potentially more favorable terms. For many homeowners, this strategy provides a smart way to leverage accumulated equity to reach financial, investment, or personal goals.
Before moving forward with a cash-out refinance, it’s essential to examine several important factors to ensure the strategy aligns with your financial goals.
One of the most significant elements to evaluate is the difference between your current mortgage rate and the new rate you’ll receive.
A cash-out refinance only makes sense when:
Carefully compare the long-term savings—or costs—before committing.
Lenders limit how much equity you can take out.
For example, with an 80% LTV cap, you can borrow up to 80% of your home’s appraised value, including your existing mortgage balance.
This means the amount of cash you receive depends on:
Like any mortgage transaction, a cash-out refinance comes with closing costs, which often range between 2%–5% of the loan amount.
Be sure to consider:
Understanding your break-even point is crucial.
When you access home equity, you’re borrowing against your property—meaning your home secures the loan.
This comes with responsibility:
Thoughtful planning is key to reducing risk.
The cash you receive is not considered taxable income, which is a major advantage.
However, consult a tax professional to understand:
A cash-out refinance can be an excellent tool—especially for home improvements, debt consolidation, or major expenses.
However, if you already have a low interest rate, refinancing your first mortgage may not be ideal.
In that case, consider alternatives:
These typically have higher rates than first mortgages, but often much lower than credit card or personal loan rates—making them strong options for debt consolidation, home upgrades, or large purchases like vacations or tuition.
A cash-out refinance can significantly strengthen your financial position when used wisely. As with any major financial decision, it’s crucial to analyze:
Careful evaluation ensures your home equity works for you—and not against you.
A rate and term refinance allows homeowners to replace their existing mortgage with a new one—primarily to secure a better interest rate, adjust the loan term, or both. Unlike a cash-out refinance, this option does not provide cash back; the goal is purely to improve the loan’s structure.
You already have a mortgage with a set interest rate and a defined remaining term. Over time, your financial goals or market conditions may change—making a refinance an attractive option.
A rate and term refinance focuses on modifying:
This type of refinance does not allow you to tap into home equity. All proceeds go strictly toward paying off the existing mortgage.
Lenders evaluate your application similarly to when you first obtained your mortgage, including:
As with any mortgage transaction, expect closing costs—which may include:
It’s important to weigh these upfront costs against the long-term savings the refinance provides.
A reduced interest rate can significantly cut your monthly mortgage payment.
Even a small reduction in rate can lead to tens of thousands of dollars saved over the mortgage’s life.
Shortening the loan term helps you build equity quicker and become mortgage-free sooner.
If you currently have an adjustable-rate mortgage (ARM), refinancing into a fixed-rate loan can provide long-term stability and peace of mind.
A rate and term refinance is ideal for homeowners who want to:
Before proceeding, review:
Speaking with a mortgage professional can help you determine whether a rate and term refinance will provide meaningful financial benefits.
A conforming loan is a type of mortgage that meets the underwriting standards established by Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that purchase and guarantee a large portion of U.S. home loans. Because these loans adhere to strict guidelines—covering credit score, income, loan size, and property requirements—they are considered lower risk for lenders. This typically results in more competitive interest rates and favorable loan terms for borrowers.
Conforming loans generally offer lower rates than non-conforming options, such as jumbo loans, because they are less risky for lenders.
Many conforming loans allow down payments as low as 3%, making them accessible for first-time buyers or borrowers with limited upfront funds.
These loans can be used to purchase or refinance:
Borrowers can choose from fixed-rate, adjustable-rate (ARM), and other loan formats, giving you flexibility to select the option that best fits your financial goals.
Conforming loans must fall below the conforming loan limit, which varies by county.
To meet GSE guidelines, borrowers typically need:
If your down payment is less than 20%, you’ll be required to carry private mortgage insurance (PMI), which adds to your monthly costs until you reach sufficient equity.
A conforming loan may be an excellent fit if you:
As long as you’re comfortable with the qualification requirements and your desired loan amount fits within the established limits, a conforming loan can offer affordability, stability, and widespread flexibility.
If you have questions or want help evaluating whether a conforming loan matches your situation, feel free to reach out—guidance is always available.
Conventional loans are mortgages that aren’t backed by a government agency like the FHA or VA. Instead, they’re offered by private lenders—banks, credit unions, and mortgage companies—and usually follow the rules set by Fannie Mae and Freddie Mac.
Rates Depend on Credit: Borrowers with weaker credit may see higher interest rates.
If you’ve got solid credit, steady income, and the ability to put some money down, a conventional loan could be a great fit. You’ll have more options and fewer restrictions—but you’ll need to meet the higher qualification standards.
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration (FHA), an agency within the U.S. Department of Housing and Urban Development (HUD). These loans are specifically designed to make homeownership more accessible—particularly for first-time buyers, those with lower credit scores, or individuals who may not have substantial savings for a down payment.
One of the biggest benefits of an FHA loan is the ability to purchase a home with as little as 3.5% down, making it a popular choice for buyers with limited upfront funds.
FHA loans are known for their lenient credit requirements. Many lenders accept credit scores as low as 580, and some may consider even lower scores with a slightly higher down payment.
FHA loans commonly come with fixed interest rates, meaning your principal and interest payments remain consistent throughout the life of the loan—making long-term budgeting easier.
The FHA Streamline Refinance program allows current FHA borrowers to refinance with reduced documentation and potentially lower interest rates, often resulting in lower monthly payments.
FHA loans require both an upfront mortgage insurance premium (UFMIP) and annual mortgage insurance premiums (MIP). These additional costs can increase your overall loan expense.
FHA loans have regional loan limits based on local housing costs. While these limits vary by market, they may restrict borrowing power in higher-priced areas.
Homes financed with an FHA loan must meet specific safety, security, and habitability standards. If a property requires repairs to meet these guidelines, it may delay or impact the approval process.
An FHA loan may be a strong choice if you:
However, it’s important to weigh the cost of mortgage insurance against the benefits of easier qualification and lower upfront requirements.
If you’d like help determining whether an FHA loan is the best fit for your financial situation or need personalized guidance, feel free to reach out—we’re here to help you make the most informed decision possible.
USDA loans are a bit of a hidden gem in the mortgage world. Backed by the U.S. Department of Agriculture, these loans are designed to support rural development and can be a fantastic option for buyers who meet the guidelines.
If you’re open to living outside densely populated urban areas, a USDA loan can be a game-changer—especially for first-time buyers or anyone without a large down payment. The program is designed to help moderate-income borrowers and can be more accessible than you might expect. While a credit score of 640 or higher is ideal, some lenders may approve lower scores with strong compensating factors.
Between the no-down-payment option, lower mortgage insurance, and competitive rates, USDA loans can offer significantly lower monthly payments compared to many other loan types.
VA loans are a fantastic financing option for eligible service members, veterans, and certain surviving spouses. Backed by the U.S. Department of Veterans Affairs, these loans come with powerful benefits that can make homeownership more accessible and affordable for those who have served.
If you’re an eligible veteran, active-duty service member, or qualifying spouse, a VA loan is often one of the best mortgage options available. The combination of no down payment, no PMI, competitive rates, and flexible credit requirements makes homeownership far more attainable.
For anyone who qualifies, this loan type is typically a top contender—especially if you don’t have a large down payment saved or want the lowest possible monthly payment.
Refinancing is the process of paying off your existing mortgage with a new mortgage. Typically, you refinance your mortgage to reduce your interest rate and monthly payment or change the length (or term) of your mortgage. You may also refinance to take cash out from your home’s equity.
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