The Tools You Need
mortgage tools designed with you in mind
Mortgage Refinance FAQ
Before you open an account, make sure you have a good understanding of the ground-level details:
Should I refinance my mortgage?
There are many reasons why homeowners refinance their mortgages, but the main reason is that their mortgage was no longer providing them with benefits that coincided with their priorities. Priorities change and qualified homeowners can also change their mortgages to better assist them with their new goals.
How much time and money can I save by refinancing?
The amount of time and money you save will depend on the type of mortgage you choose to refinance into. If you are refinancing into a shorter term mortgage such as a 15-Year Fixed Interest Rate Mortgage from a 30-Year Fixed Interest Rate Mortgage, you will save many years and much more money in interest.
It is important to note that refinancing your mortgage will not change the principal balance of your loan, it will only change the interest rate or length of term.
How much will my new payment be?
This will depend on the type of loan you choose and how much your interest rate will be. If you choose to refinance into a loan with a shorter term, your new payment amount will be larger because you are choosing to pay more to get out of debt faster. Similarly, if you choose to refinance into a longer term mortgage, your new payment amount will be less.
Can I refinance to get rid of PMI?
Normally, no. PMI is required on all mortgages if less than 20% is put down for a down payment. So long as the loan balance is more than 80% of the original home value, you will be required to pay for PMI. The only exception to this rule is the VA Loan as veterans and active duty military members are not required to get mortgage insurance, no matter how little the down payment is.
How do you calculate your new mortgage payment and refinance rate?
Like your previous mortgage payment, your payment will consist of your principal, interest, property taxes, and homeowner’s insurance. Depending on the mortgage you choose and your new interest rate, your payment amount will either increase or decrease.
For refinancing, a home appraisal is very important. An appraisal is done by a 3rd party and the appraiser will inspect your home to see if the home’s value has gone up or down. They will look at the value of neighboring homes and check to see if repairs and other features have been added to the home. If the home value has increased since the purchase, you have gained equity. If the value has gone down so low that you are underwater, you won’t be able to refinance.
Your Loan to Value ratio (LTV) affects the rate and type of loan you may qualify for. It shows what you owe on your mortgage against the home value. Having a low LTV is best because it can get you a better interest rate. If you have a high LTV, your refinance may require PMI.
Latest Mortgage Reads
You bought your house thinking about how you wanted to make it a home, a place where you put down roots with your family. But now that you’re settled you’re thinking about some remodeling projects and getting the home improvement itch. But home...
It’s no big secret — buying a house is extremely stressful. A real estate purchase can affect your life and finances for years to come. So, it’s no real wonder why people get a little antsy about possibly making the wrong decision. Fortunately, there are...
Research shows that 23% of American homeowners were unable to pay the full amount of their monthly mortgage payment in April 2020. Of that number, 11% were only able to make a partial payment, and 12% could not make a payment. Does this include you? If so, there are...
You’re ready to step out on your own and buy a home. The only problem? Your dreams might be big but your bank account isn’t. You’ve heard the advice of financial experts. You know it’s ideal to contribute a down payment of at least 20% of your...
If you’re looking to refinance your existing FHA loan, then you may want to consider an FHA Streamline. The FHA Streamline Refinance program helps borrowers refinance their current FHA loan more quickly and at a lower rate. It’ll also save you from having...
A Life Expectancy Set Aside, or LESA, is a government-implemented guideline that requires some reverse mortgage borrowers to put aside a portion of their reverse mortgage proceeds to pay for their property taxes and homeowners insurance for a certain amount of time....