When rates are low, everyone rushes to refinance their house because it’s possible to save hundreds (or thousands!) on your monthly mortgage payment. What everyone seems to know is that is is possible to refinance, but what they often need help with is finding the exact right program for their situation where they can both qualify for a refinance and save money at the same time.
Many times the program that you will qualify for when refinancing depends on what the current type of mortgage you have now is. For example, if you have an FHA loan and just want to get a lower interest rate and monthly payment, you will want to try to first qualify for the FHA streamline program – but that program isn’t available if you have a conventional loan. And if you have a conventional loan, it isn’t possible to qualify for the FHA streamline program. This means if you are aware of what kind of loan you currently have, you are going to be able to more easily find the right refinance program for your needs.
Here are just a few of the more popular refinance programs that many people are taking advantage of in today’s market:
Home Affordable Refinance Program (HARP® Refinance)
The HARP® refinance was first announced by President Obama in 2009 and has been modified since to include people who are severely under water in their house and owe more than it is worth. The HARP® program is a great loan program if your loan is currently owned by Freddie Mac or Fannie Mae – but your loan must be owned by one of those in order to qualify.
FHA Streamline Refinance
The FHA streamline refinance is probably the most popular FHA refinance program because it allows you to get a lower monthly payment and interest rate without having to fully re-qualify for a new loan. The “streamline” refers to the reduced amount of paperwork required – for example, you may not be required to have a minimum credit score or appraisal depending on your situation.
VA Streamline Refinance
The VA streamline refinance program is the sister program to the FHA streamline refinance – except for this program is only for Veterans who currently have a VA loan. If you currently have a VA loan, the VA streamline can help you get a lower interest rate and payment and also has less documentation than a full documentation loan. Like the FHA streamline, a minimum credit score and appraisal may or may not be required depending on your lender.
Cash Out Refinance
If you are interested in getting cash out from the equity of your house – that is traditionally referred to as a “cash out refinance” and there are various cash-out programs available regardless what kind of loan you currently have. Be prepared to fully document your income, assets, credit and more when doing a cash-out refinance – but if you can do all of those things, you can leverage the equity in your home for whatever purpose you would like. Some homeowners take cash out for home improvements, some for other expenses like college – and some just go on vacation!
Refinance When Rates Are Low
Rates have been low for a while – and at some point they will certainly go back up. While you don’t have to act today (rates most likely won’t go up overnight, it will take a little bit) to save money, it is a good idea not to wait too long – the trend is rising for rates and they are expected to rise in the future. Not sure if it makes sense for you to refinance in your situation? We help people all day get the right information they need to make a good decision. Call us today!