Three Different Types Of Refinancing Loans

Are you thinking about refinancing your home loan? Whether you’re interested in getting a cash out refinance loan that lets you get money back on the loan after the original mortgage and associated fees has been paid off, or if you’re looking for a lower monthly payment, there are home loan refinance options for you.

There can also be added choices for borrowers who qualify for home equity conversion mortgages, which may not work the same as a standard refinance but can offer cash back to the borrower.

The type of refinance loan you choose depends on your financial goals. Borrowers who need lower payments should choose a refinance loan that features no cash back to the borrower and offers a lower mortgage loan interest rate.

This is easy for borrowers with existing VA or FHA loans—something called Streamline Refinancing has no government-required credit check and must generally result in a benefit to the borrower such as a lower rate, a lower payment, or moving from an adjustable rate mortgage to a fixed rate loan.

If you refinance from a conventional loan to a VA or FHA mortgage, the Streamline option isn’t available as Streamline Refinancing is only for existing FHA or VA mortgages.

However, if you need cash-out refinance loans, FHA loan rules do permit refinancing from an existing conventional or non-FHA mortgage to an FHA cash out loan. VA cash out loans allow the same thing. The important thing to remember about cash out refinance loans is that you should shop around for the best interest rate you can find and don’t assume you are required to stay with your current lender. Any participating VA or FHA lender can offer qualified borrowers a refinance loan for cash out.

Home equity conversion mortgages are available from participating FHA lenders and conventional lenders alike, the requirements for the FHA program state the borrower must be age 62 or older and own or be very close to owning the property. Conventional home equity loans may have varying terms and conditions depending on the company.

Discuss your financial needs with a loan officer to determine what mortgage loan is best for you.

Rate this item
(1 Vote)

Top Reads This Month

  • FHA Refinance Loans and Interest Rates

    FHA mortgage loan rates and refinance loan rates stayed well below the 4 percent zone in the last days of the year--now that the new year is here, borrowers may not be sure how long the best-execution FHA mortgage loan interest rates reported at the end of the year may last. Do you know whether your’re ready to commit to…

  • 2018 VA Loan Guidelines and Loan Limits

    If you’ve served in the active military for at least six months, or in the reserves or National Guard for six years, or a spouse of someone who meets these conditions, you’ll likely qualify. If you are approved, you’ll receive a document called a VA certificate of eligibility which will prove to lenders that you qualify for a VA loan.…

About Refinance Loan Rate