The Conventional Refinance is an excellent option when you are looking to lower your payment, change your term from an adjustable to a fixed or payoff a 2nd mortgage from your original purchase. In order to qualify for the refinance the lender will take a look at the following:
- Your total monthly expenses
- Your total gross income per month
- Your employment history
- Your credit score and payment history
- Your assets (checking, savings, and retirement accounts)
- An appraisal to determine the current value of your home
A common misconception about conventional refinances is that you need 20% equity in order to qualify. The reality is conventional financing allows you to refinance with as little as 5% equity in combination with financed, monthly, or lender paid mortgage insurance.
Why Are Conventional Loans So Great?
The Conventional Refinance program has very competitive pricing compared to some other programs available. This can make a big difference in your monthly mortgage payment and even the interest you will pay over the life of the loan. Even though this program is more difficult to qualify for you need to consider it, especially if you have equity in your home, above average credit, or would like to avoid mortgage insurance.
What Are the Advantages of Conventional Loans?
- Competitive pricing
- No prepayment penalty ever
- 30yr, 25yr, 20yr, 15yr, or 10yr
- Up to 45% debt to income ratio
- With or without mortgage insurance
What Are the Requirements?
- Minimum credit score 640
- Debt to income ratio under 45%
- No late payments over 30 days in last 6 months
Conventional Cashout Refinance
The Conventional Cashout is an excellent option to leverage the equity you have in your home to be able to pay off debt, do home improvement, take a vacation or simply pullout cash for anything you want. It’s one of the most effective ways to consolidate high interest debt, including credit cards under one low fixed payment per month which may be tax deductible. You can also use it to refinance out of other types of mortgages to get more favorable terms or even pay a second mortgage off.
What Are the Advantages of A Cashout?
- Cashout up to $417K
- Roll in all closing costs
- Cashout up to 80% LTV
- Debt to income ratio up to 45%
- Consolidate debt for better terms
What Are the Requirements?
- Primary residence only
- Minimum credit score 660
- No late payments over 30 days in last 12 months
Frequently Asked Conventional Questions:
What are the documents I will need?
- Copy of driver’s license
- Two W2’s or Tax returns
- Two most recent paystubs
- Two most recent asset statements
- Copy of your mortgage statement
- Contact information for insurance agent
Will I be required to have an escrow account for insurance and taxes?
No, you if you would like you can pay your property taxes and insurance on your own.
What types of loans can I refinance?
Conventional loans allow you to refinance single family homes, condos, investment properties, and 2nd vacation homes.
Will I have mortgage insurance?
The short answer is it depends. There are conventional programs that can refinance with or without mortgage insurance. This includes monthly mortgage insurance, financed mortgage insurance or lender paid mortgage insurance.
How much can I cash out?
In most cases you can cashout up to 80% of the appraised value of your home. This will depend on your debt burden, credit score, and if the home is your primary or an investment property.
How long does it take to refinance?
The normal turn time for a refinance is about 30 days. This assumes you have all your documentation available and we schedule your appraisal upfront.
Should I make my mortgage payment during the process?
Yes, always make your mortgage payment. Your refinance is not final until the lender wires the funds to the attorney (3) business days after closing.