Determining if a home refinance loan is right can be confusing. That's why we've put together a list of common questions that homeowners have when considering refinancing.
What is Refinancing?
Refinancing is simply getting one loan to pay off another.
What does refinancing cost?
Typically, the closing cost of a refinance is between 1% & 2% of the loan amount, lender fees included. You may choose to pay points (see below) to lower your interest rate, or you could want to do a Low- or No-cost refinance. Contact us if you have any questions or would like to know more.
What are points?
Points (or discount points) are a way of lowering your interest rate. By paying 1% of the total loan amount up-front, a borrower can lower his interest rate by about 1/8%.
How does the APR differ from the interest rate?
The rate refers to what percentage of your loan you will pay in interest per month, whereas the annual percentage rate (APR) is an adjusted percentage that expresses the yearly cost and also includes certain charges and fees.
What are FRM & ARM?
The interest rate of a Fixed-rate Mortgage (FRM) will not change for the life of the loan. Alternatively, an Adjustable-rate Mortgage (ARM) will be subject to periodical interest rate adjustments based on interest rates around the country.
What is PMI?
PMI stands for Private Mortgage Insurance. Borrowers with less than a 20 percent down payment are required to carry this insurance as a means of protecting the lender against default. For those with good credit, there are programs available that don't include monthly mortgage insurance.
Will I need to get an appraisal when I refinance?
Does bad credit exclude me from a refinance loan?
Not exactly. Good credit always makes the process a little more smooth, but some government backed loans like FHA and VA allow for not-so-perfect credit scores.
Can I get cash from a refinance loan?
Yes. Depending on the type of refinance loan you opt for you can take out cash to use for bills, home repairs or whatever you might need it for. Please contact us today if you're interested in this type of refinance loan.
How long does it take to go through the refinance process?
A typically refinance usually takes between 4 to 6 weeks.