Refinance

Cash-out refinance is an option for homeowners who would like to liquidate some of the equity in their homes. They replace your original mortgage, and pay the difference between your home’s current value and the current balance of your mortgage. Cash out refinances are typically used to:

• Pay for additional improvements to the home
• Pay for a large expense, such as a wedding or college education
• Consolidate higher-interest debt, such as high credit card balances

Keep in mind that there are certain limits and changes that come with a cash-out refinance. You can only cash out 80-90% of the total value, and if you cash out more than 80%, you will need to pay PMI. With a refinance, your mortgage terms will change, including APR and terms. You will need to pay closing costs on a cash-out refinance.

Streamline refinances are offered for both FHA and VA type loans. This type of refinance can be simpler, as it uses the original loan paperwork and reassesses the loan based on your current home equity. Streamline refinances are helpful to:

• Change your loan type, such as switching from an ARM to fixed-rate.
• Reduce your loan APR after change in the market or your credit.
• Keep borrowers who are underwater on home value in their homes

As with a cash-out refinance, there are certain limits and terms that come with the streamline. For example, the FHA and VA only approve streamlines where the net benefit to the borrow is a 5% or more reduction in home payment cost. Additionally, streamline refinances do not allow the borrower to cash out equity on the home. For a full description of the terms for your situation, please contact us.