What is a refinancing loan?

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Refinancing is substituting a currently existing loan for a new one with better terms. Improving the terms of a loan may mean:

1. A lower interest rate

2. A lower monthly payment

3. Substituting an adjustable or variable loan for a fixed-rate loan

4. Increase the value of the loan and converting the difference into money.

 

Refinancing a mortgage can take many different forms. These are the most common:

1. Refinancing of interest rate and terms: substituting a loan for another without increases its value. Only the interest rate or terms are altered.

2. Limited Cash-out Refinancing: this type of refinancing results in a larger loan, as the costs of refinancing are added to the rest of the loan as opposed to being paid out-of-pocket by the borrower.as

3. Cash Out refinancing: this involves substituting a loan for a higher value one, and taking the difference as money.

4. Streamline refinancing: This is a special type of interest rate and terms refinancing in which the current lender refinances the loan. The subscription is much less complex, credit, income, and work status might not be verified, and an appraisal may not be necessary.

 

Requirements:

• Minimum credit score: 660

• Maximum DTI: 55%

• Maximum LTV: 80%

• Last 2 years of tax returns

• Last 2 years of W2s

• Last 2 years of bank statements

• Last 30 days of pay stubs

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Standard vs. Limited Cash-Out Refinancing

 

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To find out if you qualify for refinancing, see us for a free consultation.

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We are always available to answer your questions.