Common questions about refinance, answered by Mike Swaleh.
Should I refinance?
It can make sense for a meaningfully better rate, a shorter term, dropping mortgage insurance, consolidating higher-interest debt, or converting an ARM to fixed. The honest test is the break-even: total cost of the refinance divided by the monthly saving tells you how many months until you are ahead. If you might move before then, it probably is not worth it. Mike can run yours.
What is the difference between rate-and-term and cash-out?
Rate-and-term replaces your existing loan with better terms and no meaningful cash back. Cash-out means borrowing more than you owe and taking the difference. Cash-out generally allows a lower maximum loan-to-value and prices higher than rate-and-term, because the risk profile is different.
Will refinancing save me money?
It can lower a payment, and it also restarts the amortization schedule – so stretching back out to thirty years can mean paying more total interest even at a lower rate. Both halves of that are true and you should see both. Mike can show you the payment and the total cost side by side so you are deciding on the full picture.
How soon after buying can I refinance?
There are seasoning requirements and they vary by program and by refinance type. Some are short, some are longer, and cash-out generally requires more seasoning than rate-and-term. Mike can tell you where your specific loan sits.
What is a streamline refinance?
For existing FHA loans there is the FHA Streamline, and for VA loans there is the IRRRL. Both use reduced documentation and in many cases skip the appraisal, which makes them faster and cheaper than a standard refinance. If you already have an FHA or VA loan, that is worth asking Mike about specifically.
Can I remove my ex-spouse from the mortgage?
A name cannot simply be removed from a mortgage – it generally takes a refinance in the remaining borrower name. That is one of the most common misconceptions we see. There is also a difference between the mortgage and the title, and the title side may involve your attorney or the terms of a decree. Mike can handle the lending half.
Can I refinance to get rid of PMI?
On a conventional loan, PMI can often be removed without refinancing once you have enough equity – by request, or automatically at a set point, subject to servicer rules. On most FHA loans the mortgage insurance lasts the life of the loan, and refinancing into a conventional loan is the usual way out. Which applies depends on your loan, and Mike can check.
Can I consolidate my debt into my mortgage?
It is possible and it can lower your total monthly outgoings. The part that has to be said clearly: it converts unsecured debt into debt secured by your home, and it stretches short-term debt over a long term. That can be the right move, and it raises the stakes. Mike will lay out both sides honestly.
How long does a refinance take?
Often a little longer than a purchase, because there is no contract deadline forcing the pace. It depends on the appraisal, how quickly documents come back and how complex the file is. Mike will not promise you a date Mike cannot hold.
Do I need an appraisal to refinance?
Sometimes not – appraisal waivers are available on some files, and streamline products often skip it entirely. Whether yours qualifies depends on the loan, the property and the automated findings. Mike can tell you early.
Mike Swaleh, Area Manager · NMLS #739145 · Fairway Independent Mortgage Corporation, NMLS Entity ID #2289
436 Lincoln Boulevard, Suite 105, Lincoln, CA 95648 · mswaleh@fairwaymc.com · Licensed in AZ, CA, CO, FL, GA, IL, KY, MO, NV, NC, OR, SC, TN, TX, WA
This information is not intended to be an indication of loan qualification, loan approval or a commitment to lend. Other limitations may apply. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Fairway is not affiliated with any government agencies. Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, License No 41DBO-78367.
Equal Housing Opportunity. Verify licensing at nmlsconsumeraccess.org
