The ultimate goal of mortgage refinancing is to lower your interest rates. If the rates of your running loan are higher than the current market rates, it is time to consider refinancing and take advantage of the low rates.
Mortgage refinancing allows you to vary the period by either shortening or to increase the term. If you increase the installment amount, you would, in effect, be reducing the loan term and lower the interests.
You can refinance to get funds for use in settling credit card debts or other liabilities. However, you only get this chance when you have been paying for your mortgage for some time and have significantly reduced the loan.
You can also refinance to vary the type of loan. You can convert your conventional loan into a Michigan FHA.
The first step in the refinancing journey is identifying the lender that offers reasonable rates and has the professionalism and unquestionable reputation. You can obtain all this information by shopping around and comparing rates. You may consult an expert or a broker. Look at the surveys and reviews from credible sources such as J.D. Power and BBB.
On identifying your preferred lender, you can tender your application and documentation for appraisal. Your debt-to-income ratio and credit scores are analyzed and prequalified. If your lender is satisfied with your ability, they issue a pre-approval offer letter. A good credit score translates to lower rates and minimum fees.
Once you get the final approval, you will be required to submit original documents and sign the offer letter. At this point, you pay the mortgage closing costs. In the case of a cash-back, you can draw the funds, but the running loan is paid off in other types, and a new one with new terms is created.
Bank of America
BOA refinances all home loan types except USDA. As an existing borrower, you get up to $600 in discounts on closing costs. The minimum score for a conventional loan is 620 and 640 for FHA. You can also refinance cash-back on home equity.
BOA allows the consolidation of several loans into one. You can reach them online or by physically visiting their branches. However, several complaints were registered in some of its branches.
Better.Com guarantees a transparent process with no hidden costs. Its loan application process is easy, and approval is instant. Moreover, the whole process can be closed within three weeks.
With a credit score requirement of at least 620, you can be financed for a conventional loan. You also get homeowners insurance if interested. However, Better.Com does not refinance government-guaranteed mortgages.
Quicken refinances all loan categories through its online platform, thus minimizing paperwork. It has a presence in 50 states. Depending on the loan type, the closing costs range between 3 and 6%. In addition, you are likely to get personalized customer service through its online support.
Fairway Independent Mortgage
Fairway refinances both government-backed and conventional mortgages. Your credit score of 580 is considered for VA and FHA, whereas conventional loans require a score of 620. Fairway thrives in excellent service and has a presence in 50 states.
The reasons for refinancing are unique to an individual based on the budget and personal needs and preferences. Generally, you can refinance to shorten the loan term, lower monthly repayments, lower the interest rate, change mortgage type, and cash out your home equity.
But before taking the final decision, you must research the best home refinancing programs in Michigan. You can use mortgage brokers, research online, or make calls. Your interest should be on rates and the total costs of refinancing. Care must be taken not to incur more costs than the benefits of refinancing.