Refinancing Is Easier Than You Think
Our experienced Newrez loan advisors offer a personalized touch, taking your needs into consideration and making the refi process easy.
Let's Run the Numbers
Think you could benefit from a refinance at a lower rate? A great way to get started is to use a calculator like this one, to see if you might be able to save money on your monthly payment. Before you invest your time in completing an application, see if - and how much - you might save.
Refinance FAQ
A home loan refinance is about striking at the right time, particularly when it comes to interest rates, home equity, and your financial and living situation. Refinancing without carefully considering these factors (and more) could end up not being in your best interest (so to speak) once it’s time to reach out to a lender.
So, before you decide that a refi is the right move for you, ask yourself these five questions:
It’s important to ask yourself this up front—because the reasons to refinance come in several different forms. With a home loan refinance, you could:
- Consolidate debt – such as high-interest credit card debt
- Get cash out for major expenses – such as home improvements or college tuition
- Shorten your loan term – such as refinancing from a 30-year to a 15-year fixed
- Lower your monthly payment – such as refinancing to a lower rate
Home equity is fundamental to refinancing – it’s the difference between the property’s current value and the amount you still owe on the loan.
When it comes down to it, “enough home equity” means a few different things. If you have a conventional loan, you’ll need to have at least 20% equity built up to qualify without having to pay private mortgage insurance (PMI).
Keep in mind: For some homeowners, adding PMI to their refinanced loan could nullify the benefits of a refi. For others, refinancing can actually eliminate PMI.
Your credit score is just as important to qualify for a refi AND get a good rate as it was when you first bought your home. But it all depends on the loan. Consider this breakdown:
- FHA loan: Typically, you’ll need a minimum score of a 580, with more favorable terms for those with 600 or above. It’s also dependent on the type of FHA refinance.
- VA Loan: The VA does not require a minimum credit score for a refi, though many, if not most, VA lenders look for a score of 620 or greater.
- Conventional Loan: Many lenders will accept a minimum score of 620 to 680. But that’s just to qualify. The best rates are usually given to scores of 740 and above.
Your closing costs are dependent on several factors, including the purchase price of the home and the loan you’re refinancing. Generally, you can expect to pay between 2% - 5% of the loan amount. Therefore, if your refinanced loan is $150,000, your closing costs would typically be between $3,000 and $7,500.
It’s crucial to determine how many months or years it will take until the benefits of your refi outweigh the costs. To calculate the break-even point for your closing costs, divide the refinancing costs by the amount you’ve lowered your monthly payment.
For example: If the refinance will reduce your monthly payment by $175, but the closing costs end up being $3,500, it will take you 20 months to break even. So, if you’re thinking about moving in a couple of years, it might not make financial sense for you to refi.
Please note that Newrez LLC may not be the servicer of your current mortgage loan account. If you have any questions about your mortgage loan account, please contact your mortgage servicer.
Newrez LLC is the lending affiliate of New Residential Mortgage LLC, the company that may own the right to service your mortgage loan.
By refinancing the existing loan, the total finance charges may be higher over the life of the loan. We may transfer your escrow account balance from your current loan to your new loan. If your current escrow amount is insufficient due to changes in taxes or insurance, we may require additional money when you close on your new loan.
This is not a commitment to lend or the guarantee of a specified interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting, and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply.
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