Refinancing replaces your current mortgage with a new one. Done for the right reasons, it can lower your payment, shorten your term or turn home equity into cash for something that matters.
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What It Is
When you refinance, a new loan pays off your existing mortgage. The new loan can have a different interest rate, term or loan type, and in some cases a higher balance so you can take cash out.
There are two main kinds. A rate-and-term refinance changes the rate, the term or both. A cash-out refinance replaces your loan with a larger one and pays you the difference.
Who It Is For
- Homeowners whose current rate is higher than what they may qualify for today.
- Borrowers who want to move from an adjustable rate to a fixed rate.
- Homeowners who want to shorten their term and build equity faster.
- Owners who want to use equity for renovations, education or consolidating higher-interest debt.
Key Features
Things to Weigh
- Closing costs: refinancing has costs, so we compare them with your monthly savings to find your break-even point.
- How long you plan to stay: the longer you keep the loan, the more time savings have to add up.
- Your equity: cash-out amounts are limited to a percentage of your home's value, often up to about 80% for conventional loans.
- Your goals: a lower payment and a faster payoff can pull in different directions.
Common Questions
How soon can I refinance after buying?
It depends on the loan program and type of refinance. Some allow it fairly soon; cash-out refinances usually have a waiting period. We will check what applies to your loan.
Will refinancing restart my loan term?
A new loan comes with a new term, but you can often choose a shorter term so you do not extend your payoff date.
Is a cash-out refinance a good way to consolidate debt?
It can lower your overall interest cost, but it secures that debt with your home. We will walk through the trade-offs with you.
See if refinancing makes sense.
Answer a few quick questions and David will reach out personally. No obligation.
Innovative Mortgage Solutions, NMLS #2302211. David L. Tripp II, NMLS #362229. Licensing can be verified at NMLS Consumer Access.
Equal Housing Opportunity. This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, property eligibility and program availability. Program features described here are general and may vary by lender; terms are subject to change without notice.