REFINANCE: make your mortgage work for you!
A mortgage refinance is the replacement of your existing mortgage with a new home loan that may have different or more favorable terms, such as a shorter repayment term, a lower interest rate, or lower monthly payments (total finance charges may be higher over the life of the loan).
Mortgage refinancing is a term that intimidates some homeowners, but don’t worry — your mortgage lender is here to educate you and provide the necessary support so you can meet your financial goals. Refinancing often results in a more favorable financial situation.
Benefits Of A Mortgage Refinance Include
Lowering Your Interest Rate
Modifying the Term of Your Loan
Debt Consolidation
Predictability
Mortgage Consolidation
Free Up Cash
FHA REFINANCE
What FHA Refinance loans are available?
If you’re considering a refinance, FHA offers several options. If you have a lower credit score or are carrying more debt, these loans generally have easier qualification requirements than conventional loans. There are refinances to meet different needs, including cash-out and renovation. As with all FHA loans, you will need to pay mortgage insurance.*
Refinance easily: FHA Streamline Refinance
The FHA Streamline Refinance is the fastest, easiest way for a homeowner with a current FHA home loan to refinance. Your home’s original purchase price is used as the current value of the home, so there’s no appraisal. There’s an added advantage if your home has lost value: You’ll still be able to borrow up to the loan limit on the original price.
Refinance for cash: FHA Cash-Out Refinance
Sometimes you need money for something important, like educational expenses, starting a business, or paying down higher-interest debt. The FHA Cash-Out Refinance allows you to take cash from your home equity – that’s the difference between what your home is worth and what you owe on your mortgage.
Refinance to renovate: FHA 203(k) loan
An FHA 203(k) loan is designed specifically for home renovations. When you use it to refinance, you pay off your existing mortgage and take out a new one with renovation funds added to it.
There are two versions:
Limited – Finance up to $35,000 in home renovations. Only certain types of repairs are eligible.
Standard – Finance a minimum of $5,000 in home repairs with no maximum. All repairs must be supported by an appraisal. More extensive structural repairs are permitted with the Standard loan than with the Limited loan.
*Mortgage insurance is required to protect lenders against losses from defaults on home mortgages. FHA loans have both an upfront mortgage insurance premium (MIP) and a monthly mortgage insurance premium. You can finance the MIP as part of your loan, and the monthly premium will be part of your mortgage payment. Our FHA Home Loans page has more information about the benefits and requirements of FHA loans.
VA IRRL (VA STREAMLINE)
What is a VA IRRRL Loan or Interest Rate Reduction Refinance Loan?
A VA Interest Rate Reduction Refinance Loan (IRRRL) — also known as a VA Streamline Refinance — is a veteran mortgage refinance program that can help veterans who already have a VA home loan benefit from a lower interest rate and lower monthly payments by refinancing their mortgage.
What Are the Benefits of a VA IRRRL Loan?
Some benefits of a VA IRRRL loan or streamline refinance loan are:
No appraisal or credit underwriting package is required.
You can include the costs of getting an IRRRL in the new loan.
You can refinance an existing VA ARM into a fixed-rate VA home loan.
You can reduce a 30-year mortgage into a 15-year mortgage to pay it off sooner.
What Do I Need To Be Eligible for a VA IRRRL Loan?
While a Certificate of Eligibility is required for a VA loan, it is not required to obtain a VA IRRRL or streamline refinance loan. However, you should still provide it to show that you previously used your veteran entitlement. Note that you cannot use the funds from your IRRRL to pay another non-VA mortgage. If you have a second mortgage, then that loan must be subordinated so your VA home loan is your first mortgage.
CrossCountry Mortgage has helped active military personnel, veterans, and other eligible groups make sense of VA loans, guide them through the process, and ultimately match them with the best mortgage option. Our commitment to the military extends to helping take the guesswork out of VA home loans and making obtaining one a straightforward and painless process. If you have a VA home loan and are having a hard time making the monthly payments, then a VA streamline refinance loan could give you lower interest rates and a lower monthly mortgage. Talk to your licensed CrossCountry Mortgage loan officer today!
USDA Rural Streamline Refinance Loan
The USDA Streamline Refinance Loan is an option for people who already have a USDA home loan for the purpose of lowering their interest rate. It was designed to emulate the successful VA Interest Rate Reduction Refinance Loan (VA IRRRL) and other popular streamline refinance loans.
What Are The Benefits?
The benefit is a streamlined process that makes getting your refinance easier. Since you already have a USDA home loan, you have already qualified, so it’s unnecessary to require redundant documentation. The streamlined process shortens the time to close on the loan and requires less paperwork. Additionally, property inspection is not required and closing costs can be absorbed into the financing, requiring less money upfront.
What Are The Eligibility Requirements?
To qualify for a USDA Streamline Refinance Loan, you must meet certain criteria as defined by the USDA:
The mortgage that is being refinanced needs to be a USDA home loan
The mortgage that is being refinanced needs to be current and not delinquent
The refinance needs to result in the lowering of the borrower’s monthly payment and interest payments
No cash may be taken out of the mortgage to pay for anything other than the existing loan
Home Improvement Financing?
If you are refinancing to make home improvements and have a USDA Rural Home Loan, the USDA program requirements allow for financing of up to 102% of the appraised value of the home. This way you are able to pay for improvements that can occur after the loan closes.