Conventional Refinance: Your Mortgage Evolves With You

A lot can change a few years into a mortgage. Your credit and income could improve, making you eligible for cheaper rates, all the while equity in your home builds. When you refinance, you replace your current loan with a new one, which comes with various benefits depending on the refinance type. Refinancing with a conventional loan can lower your mortgage payments and rates, pay off your mortgage faster, pay down other high interest debt, or help you borrow cash for other expenses.

Rate and term refinance

Reduce your monthly mortgage payment by lowering your interest rate. This can also help you pay down your mortgage faster. If you have 20% equity in your home when you refinance, you can save additional costs by eliminating mortgage insurance costs.

Cash-out refinance

The equity you’ve built in your home has value of its own, which you can borrow against for cash. This loan replaces your current mortgage with a new, larger mortgage, totaling more than you owe on the house. In return, you get the difference in cash, which you can use for other expenses. The cash you borrow can be up to 80% of the home’s value.

Many borrowers use this option to pay down high-interest debt or cover other immediate expenses, such as home renovations or college tuition.

How to Get a Conventional Refinance Loan

Connect with us to assess whether you’ll benefit from refinancing your current mortgage. For a conventional refinance, we’ll consider your current interest rate, credit score, and finances. Then we’ll do a home appraisal and determine the amount of equity you have in the home.

Whether you’re interested in a rate and term or a cash-out refinance, we’ll explain your options to see what provides you with the most benefit. We’ll also discuss the new potential terms you pre-qualify for, guiding you through each step until we can close your new refinance loan.

Conventional Refinance Requirements

These are the common requirements you may need to pre-qualify for a conventional refinance. If you have questions about these requirements, we’re here to help.

• In most cases it’s best to have a credit score of 620 or higher. With higher credit scores often comes better interest rates.
• In the underwriting phase, you’ll need documentation of consistent income with a Debt-to-Income ratio at or below 50%. This ratio shows how much of your monthly income goes to paying your current debt.
• Along with income information, you need to share employment verification and history.
• A Loan-to-Value ratio of 80% or less, meaning you’ve paid 20% equity into the home. This is not always required but it can eliminate Private Mortgage Insurance (PMI) and allow you to borrow the most cash.

Conventional Refinance FAQs

Your home is a major investment. It’s ok to have questions about refinancing it. We’ve compiled answers to the frequently asked ones, but don’t hesitate to ask more.