Refinancing your mortgage is possible in three ways. Each has its own benefits and costs.

There are many options available to refinance your mortgage. Each option is tailored to meet your specific needs. Our Beverly Hills Mortgage Brokers recommend that talk to your lender about the benefits and costs of each option, as refinancing can take both time and money.

Refinance replaces an existing loan by a new loan which pays off the debt from the previous loan. You should expect to receive better terms and rates on the new loan, which will improve your financial position.

Refinances without cash out

A no cash-out refinance is primarily used to refinance the unpaid mortgage balance. This is the most popular option, and it may be a good choice if you are looking to:

  • Reduce your mortgage rateRefinancing may be an option if your mortgage rate is lower than it was when you closed your mortgage. This could decrease your monthly payments as well as the total interest you pay over the loan’s life.
  • You can move from one mortgage product into another.Refinance your mortgage if your current mortgage is an adjustable rate mortgage (ARM), and it doesn’t make sense for your financial and personal goals.30-year fixed rate mortgage.
  • Increase equity quicker.You may be able to refinance to a loan with a shorter repayment term if your financial situation has improved after your purchase. You can switch from a 30-year fixed rate mortgage to a fifteen-year fixed rate mortgage. Although your monthly payments will be higher, even if you refinance to a lower rate mortgage rate, you can still build equity faster and own your home sooner while paying less interest.

Refinance with cash-out

A cash-out refinance is a good option if you have significant equity built up through your monthly payments or your home’s appreciation. This will improve your financial situation and increase the value of your home by making improvements.

A cash-out refinance is when you refinance your mortgage for more money than you currently owe. In return, you get a portion back in cash. Because you borrow more money to finance your mortgage, cash-out refinances usually have a slightly higher rate. This is because the lender takes on additional risk.

Freddie Mac Enhanced Relief Refinance(sm)

An Enhanced Relief Refinance may be a good option if you are looking to refinance, but your loan to value ratio (how much your mortgage owes compared to your home’s appraised values) is higher than the maximum permitted for a standard no-cash-out refinance product. These are the requirements to be eligible for this type of refinance:

  • Your loan must be owned by Freddie Mac.
  • Your loan must have a note date on or after October 1, 2017.
  • You must keep up with your payments. There should be no 30-day delinquencies within the last six months, and no more than one 30-day delay in the last 12 months.
  • The mortgage you are refinancing must not have been refinanced under HARP, a federal program that was launched in 2009 and which expired December 31, 2018.

An Enhanced Relief Mortgage can help you get a monthly payment that you can afford. It may reduce your monthly mortgage payment and mortgage rate, replace an ARM with fixed-rate mortgage, or reduce your mortgage term (e.g. From 30 years to fifteen years

Our Beverly Hills Mortgage Brokers suggest that you talk to your lender about your options for refinance. Refinance of your loan does not necessarily require you to use the same lender. In fact, it’s in your best interest to meet with multiple lenders and compare their Loan Estimates to determine which lender offers the best terms and cost.

Although it may take longer, these extra steps could save you thousands over the long-term.

You’ll need to pay all fees associated with refinance.