If you are a homeowner and are in need of some quick cash, then look no further than your house. You can refinance your house, which essentially just means paying off an existing loan and taking out a new one. More simply, you take out a loan for your home’s full market value, pay off the remainder of your mortgage with it, and then get to keep the rest. Your mortgage then restarted.
Refinancing your house can be a great way of getting a large amount of money quickly, without having to worry about taking out a personal loan. Something that you might not know is that there are different types of mortgage refinances. Refinancing can also help you to change your mortgage’s terms, rates, and monthly payment amount.
This post will tell you about all of the different types of mortgage refinances:
Cash-out refinancing is one of the first refinancing methods for you to consider. Most experts agree that it’s the best way to refinance your home. If you are wondering what is cash out refinance, then it is essentially just when you turn your home’s existing equity into cash. You refinance your mortgage at a higher amount, and the new loan pays off your old loan, and then you get to keep the extra money. You should be aware that once you do this, your home’s equity will fall.
Cash-in refinancing is the exact opposite of cash-out refinancing. Instead of taking equity out of your home, you put it in. By doing this, you are able to reduce your home’s loan-to-value ratio. Cash-in refinancing isn’t a way of accessing money immediately, but it does allow you to increase the amount of home equity that you have for the future. It is also a good way to bring down the amount of money that you have to pay each month as part of your mortgage payments.
A no-closing-cost refinance is an option that enables people to take out a loan without paying closing costs upfront. Instead, closing costs are covered by a higher interest rate on the loan that’s being paid out. If you only intend on living in your house for a short period of time and don’t intend on staying there long-term, then this is an option that’s good for you. It might be worth speaking to a loan specialist to fully explore your options, so you can determine whether or not this is the option that’s right for you.
Rate and Term Refinance
A rate and term refinance is a great option for people who want to change their existing mortgage’s interest rates and loan terms. Without these refinancing options, it can be very difficult to change a mortgage’s rates and terms. Mortgage lenders can be very rigid and make it as difficult as possible for people to do this. A rate and term refinance can help people to pursue a more favorable term with another lender (or even their existing lender). Your mortgage’s size will remain the same, but with this kind of refinancing, you are able to reduce your interest or payments.
A short refinance is something else that you may want to consider. This is a form of refinancing that’s a suitable option for people who have defaulted on their mortgage payment and risk having their house repossessed. This form of refinancing enables you to replace your mortgage with a loan. It also enables you to reduce your mortgage’s interest rate and the size of the monthly payments that you have to make.
If you are over the age of 62 and have a large amount of equity in your home, then you could qualify for a reverse mortgage. If you take out a reverse mortgage, then you won’t have to make any repayments until you die, and will receive a large sum of money. Once you pass away, your loan balance will be settled through the proceeds of your home’s sale. Any money that is left over can then be distributed to your will’s beneficiaries. Make sure to carefully think about your situation and your beneficiaries’ situations before doing this. It can interfere with their inheritance if you take out this kind of loan.
FHA Streamline Refinance
If you have a Federal Housing Administration loan and want to lower your monthly payments, then you could apply for an FHA streamline refinance. This kind of refinance can help you to significantly reduce your monthly payments. You also get to choose between a traditional credit check and a non-credit-qualifying check, depending on your personal situation. If you are interested in taking out one of these refinances, then it’s a good idea to sit down and explain your situation to the loan company’s representatives, so that you can make the decision that’s best for you.
USDA Streamline Refinance
A USDA streamline refinance enables anybody who has borrowed money from the United States Department of Agriculture to lower their payment rates and change the terms of their loans. This is a good option for people who have low equity in their homes. As with the previous streamlined loan, you can choose between having your credit score checked or a non-qualifying credit check. Again, it’s a good idea to talk to a representative of the company offering the streamlined loan, so that you can determine which is best for you.
VA Streamline Refinance
The last form of a streamline refinance you may want to consider is a VA streamline refinance, which is an option that’s available to people who have taken out a loan from the Department of Veteran Affairs. In order to qualify for this kind of re-financing (or even a loan from the VA), you need to be a veteran, which means that you need to have served in the military. This form of refinancing allows you to lower your monthly interest rates and payments, and even shorten the term of your loan. All you need to do to qualify for this is to send your proof of address and service to the relevant body.
If you intend on refinancing your home, then it’s a good idea to first explore all of the different options that you have available to you. You need to explore your options so that you can select the method of refinancing that’s right for you.