Refinancing your mortgage is possible in three ways. Each option has its advantages and disadvantages.
There are many ways to refinance your mortgage. Each option can be customized to meet your needs. Beverly Hills Mortgage Brokers recommend speaking to your lender about each option’s costs and benefits. Refinancing is expensive and time-consuming.
Refinance allows you to repay an existing loan by getting a new loan. You will get better rates and terms with the new loan, which will improve your financial position.
Refinances without cash out
A no-cash out refinance loan is used to repay your mortgage balance. This is the most popular option and could be a good choice if you:
- Refinance might be an option for you if your mortgage rate is lower than it was when you first closed your mortgage. This will reduce your monthly payments as well as the interest that you pay over the loan’s life.
- Switching between mortgage products is possible.
- Increase equity quicker. If your financial situation has improved after your purchase, you may qualify to refinance to a loan with a shorter repayment term. It is possible to switch from a 30-year fixed rate mortgage to a fifteen-year fixed rate mortgage. Refinance to a lower rate mortgage rate can help you build equity quicker, own your home sooner and pay less interest.
Refinance with cashout
A cash-out refinance is a good option if you have significant equity, which has been built up through your monthly payments or the appreciation in your home. This can help you improve your financial situation and increase the value of your home.
Refinance your mortgage with cash-out refinance is when you refinance for more than what you owe. In return, you get cash. Because you borrowed more money for your mortgage, cash-out refinances have higher rates. This is because the lender takes on more risk.
Freddie Mac Enhanced Relief Refinance(sm)
An Enhanced Relief Refinance may be the best option if you are looking to refinance your house. Because your loan-to value ratio (how much you owe on your mortgage relative to the appraised value of your home) is higher than that allowed for a no cash-out product. These are the conditions that you must meet to be eligible for this type of refinance.
- Your loan must be owned by Freddie Mac.
- You must set note dates for your loan starting on or after October 1, 2017.
- You are responsible for paying your bills on time. There must be no more than 30 days delay in the past six months, and no more than one thirty-day delay in the last twelve months.
- Only refinance your mortgage if it hasn’t been refinanced under the HARP. This federal program was created in 2009 and ended December 31, 2018.
An Enhanced Relief Mortgage allows you to have a monthly payment that you can afford. Your monthly mortgage payment may be reduced, your mortgage rate may be lower or you can replace an ARM mortgage by a fixed-rate one. You can lower your monthly mortgage payment, reduce the rate of your ARM mortgage, and reduce your term.
Beverly Hills Mortgage Brokers suggests that you talk to your lender about refinance options. Refinances don’t always have to be with the same lender. You are best to talk to multiple lenders in order to get Loan Estimates from different lenders and to determine which lender offers the best terms and lowest costs.
Even though these extra steps may take longer, they can save you thousands over the long-term. Refinance fees are added to your account.