Your Current Mortgage
Savvy homeowners know that it’s important to reassess their mortgage on an annual basis to ensure that there are no better loan options available. Refinancing can lower your rate, put cash in your pocket and provide better loan terms. Best Rates Mortgage brokers are refinancing experts, and we’ll work with you to find the option that best fits your financial priorities.
10 , 15 and 30 year Fixed Rate Mortgages
5, 7 and 10 year Adjustable Rate Mortgages
VA Interest Rate Reduction Refinance Loan
Cash-Out Refinance Loan
203k Streamline Rehab Loan
A rate and term refinance is exactly how it sounds. This type of refinance is used either to lower your term to a 15 year mortgage, extend your term out to another 30 year mortgage, or lower your current mortgage rate. We consistently see borrowers purchase a home at a higher rate than the lowest rate in the market because that is all that they qualify for at the time, then refinance to a lower rate once they are in their home and have made payments for 6 months on their mortgage. The reason this happens is because people are tired of throwing money away on rent, and want to get into a home regardless of the interest rate with the plan to build their credit score in the next 6 months, then refinance to a lower rate and payment. The reason people are able to do this is due to their credit rising significantly once they start making their mortgage payments on time, which will in turn qualify them for a lower rate.
A cash-out refinance is when a borrower has equity in their property and they want to refinance the home to receive cash at the closing. The biggest misconception of pulling cash out of a home is that you can pull out as much cash as the equity will allow. This simply is not true. A borrower can only pull out equity up to 85% of the value of the home. For example, if a person owned a home worth $100,000 and they had a balance of $30,000 with the bank, the borrower could only pull out $55,000 out of the property. The reason banks no longer allow you to pull more cash out than 85% is due to them being able to sell the home quickly and make money in the event of a default on the mortgage.
Another misconception we see from borrowers is that they think that since it’s their equity they can do whatever they want with it once they receive the money. However, on the loan application you must state an acceptable reason for what you are going to do with the cash once received. Acceptable reasons lenders accept are pulling the cash out for home repairs and/or to pay off debt. Obviously, there are other acceptable reasons to pull the cash out but the two named above are the most popular.
reasons to refinance for debt consolidation
- Lower Interest Rate
- One Affordable Monthly Payment
- Tax Benefit
- Relief from credit card debt
Documents Needed for a Complete Application
- Loan Application signed by the borrower.
- Credit Report.
- If purchasing a home, a purchase contract.
- Bank statements.
- Pay stubs.
- Tax Returns for the past two years.
- Investment account statements.
- Any Social Security or Disability statements.
- Signed mortgage diclosures.
- Title commitment
- Home Owner’s Insurance declaration page
- Any condo certifications if buying a condo.
- Water stamps if required by the county.
- Deed of Mortgage.