When you refinance a loan, you pay off your existing home loan and replace it with a new one, or combine a first and second mortgage into a single new loan. Refinancing is an excellent way to take advantage of lower rates, change the type of home loan you have, or access equity in your house.
There are three primary reasons to refinance your mortgage.
If you have a substantial amount of equity in your home, you can refinance into a new, higher-balance loan to cash out your equity. This is a popular choice among homeowners who want to pay off debt or get together cash for a big purchase, such as a vehicle. A cash-out refinance usually has a higher interest rate than a straight refinance. Keep in mind that while your interest rate will be lower than a credit card interest rate, your payments will be spread out over 15 to 30 years, so you will likely pay more in the long run. Doing so will also turn unsecured debt into secured debt – with your home as collateral.
The most common reason to refinance is to take advantage of lower interest rates. There are closing costs with a refinancing loan, so it is usually best to refinance if the interest rate will be at least 1 percent lower. With a lower interest rate, your monthly payments will be lower.
You can also refinance your mortgage to get a new type of loan. For example, you may want to turn an adjustable-rate mortgage (ARM), interest-only loan, or balloon payment loan into a standard fixed-rate mortgage.
You will need to go through the same process to refinance as when you got your original loan. This includes a credit check and employment and income verification. You will need to determine which type of loan you want before you apply, and choose a lender.
You do not need to refinance with the same lender as the original loan. You can turn to a mortgage broker to find the best refinancing rate. Once your application is processed, your home must be appraised. If your home's value has dropped, you may not be able to refinance your mortgage through conventional means.
You do have options if you owe more on your mortgage than your home is worth. While most lenders require that you have at least 20 percent equity in your home, you may try the following options:
Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:
An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020