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Refinance Guide

Current interest rate reduction is excellent news for current homeowners who are thinking about refinancing!

Take Cash Out    Lower Payment    Shorten Mortgage Term    Consolidate Debt

There’s a lot of buzz about refinancing in the news lately, what with lower interest rates and a relatively stable housing market. Homeowners may be wondering if it’s an opportunity to pursue or to swat away, so let’s look at the whys and hows of refinancing your mortgage.

Refinancing requires replacing your current mortgage with a new loan, meaning the process is similar to what you went through to purchase your home originally. There are typically four main reasons to refinance that include:

CASH-OUT REFINANCE

The most popular current option for refinancing is to take cash out of the home’s equity. When the value of the property has increased and/or the rates have dropped, homeowners can take the difference between the new loan and the home’s appraised value as “cash out.” The benefits vary from borrower to borrower, but it’s often an excellent way to consolidate debt or re-invest into the home by remodeling or improving its value. The proceeds are tax-free which adds to the appeal of this option.  For more information, read here.

LOWER MONTHLY PAYMENT

If the current interest rates are lower than when the home was first purchased, then refinancing can reduce the monthly payment, freeing up more income for savings or other needs. In addition, refinancing can eliminate mortgage insurance that may have been required on the original loan, putting even more money in your pocket each month. 

REDUCE THE RATE

Adjustable rate mortgages mean monthly payments can go up or down, depending on interest rates. Homeowners who seek the security of a fixed rate may want to refinance with that objective in mind. Even if the difference isn’t significantly noticeable, the long-term peace of mind is. 

SHORTER TERM

Another long-view advantage of refinancing is to shorten the term of the loan from a 30-year to a 25, 20 or 15-year mortgage. While the monthly payment will probably be higher, you’ll garner a better interest rate, resulting in more equity in the home and a bigger reduction of the overall life of the debt. This ultimately puts you on track to pay off the mortgage while still owning your home! 

If any of those “whys” speak to you, then it’s time to explore the “how.”  Need help navigating? 

Contact EnTrust Funding today! 

Just as when you originally purchased your home, a lender will look at several factors for approval. Refinancing can often be a smoother process, but your credit score will still be considered, as well as your debt-to-income ratio (DTI). Depending on the lender and the type of loan, a DTI of 50% or lower is ideal. This means that your monthly income should be at least double your monthly debts, including mortgage payment. EnTrust Funding can work with homeowners with as low as 500 FICO score.  

Having an idea of your home’s worth before starting the process will give you the confidence to proceed. If neighborhood values have increased and you’ve been steadily building equity in your home, then refinancing could be an easy decision. Most lenders require at least one year in the home before refinancing an existing mortgage.

With the housing market and interest rates in constant motion, it’s a good idea to look at your personal finances and needs. At EnTrust Funding (ETF), we have a team of lending experts and a variety of programs for all types of homeowners. With a simple conversation we can help you determine the why and how of your refinancing opportunities. Give ETF a call today for all the answers.

EnTrust Funding can work with borrowers with as low as 500 Credit Score.

To see if you qualify, contact us today!

Refinance Programs

Home Equity Refinance

 

Get Cash From Your Home

Use the equity in your home to help achieve your financial goals. 

The most popular current option for refinancing is to take cash out of the home’s equity. When the value of the property has increased and/or the rates have dropped, homeowners can take the difference between the new loan and the home’s appraised value as “cash out.” The benefits vary from borrower to borrower, but it’s often an excellent way to consolidate debt or re-invest into the home by remodeling or improving its value. The proceeds are tax-free which adds to the appeal of this option.

Need to remodel your house or just need some cash for a rainy day? With soaring values, your home probably has significant equity. Convert that equity into a tangible item.

You can borrow large amounts of money and qualify easier because the loan is secured by your home. You get options to lower rates than credit cards and may qualify for tax deduction on the interest payments.

 

Features of Home Equity Loans

 

  • Potential tax advantages

  • Consistent repayment for the life of the loan

  • Ability to consolidation other higher-rate debts

  • Flexibility to pay for large planned or even unexpected expenses

  • Low competitive rates and fees

  • Easy access to funds

The payments will depend on your financial situation and the current market interest rates.

FHA

 

An FHA loan is a mortgage insured by the Federal Housing Administration. In addition to your monthly mortgage payment, there is a mortgage insurance premium that protects the lender from a borrower defaulting. FHA loans are usually for first-time homebuyers who cannot meet specific down payment and/or credit score requirements.

 

An FHA might be the loan for you if:

  • You are unable to meet stricter qualification requirements such as higher credit scores

  • You prefer less than 20% down payment (as low as 3.5% down)

  • You currently have an FHA and would like an FHA streamline refinance or FHA cash out refinance

ETF can help get you in the right program today!

VA

 

VA Loans are specifically offered to active military and veterans (or their surviving spouses). If eligible, you may qualify for 100% financing, or $0 down payment. Almost all other loan options do not offer zero down payment.

 

We have fixed-rate loans available and have more flexible qualification options than conventional loans. Some of the VA loans we offer are:

 

  • Fixed rate VA loans

  • ARM VA loans

  • Jumbo VA loans

  • VA streamline refinance

  • Cash out VA refinance

  • Refinance of up to 120% of primary residence value

 

The payments will depend on your financial situation and the current market interest rates.

 

Contact EnTrust Funding VA Lending Expert if you have any questions about our VA programs.

Conventional Refinance

 

Our most popular loans, fixed rate mortgages offer you consistency when making your monthly mortgage payments. The mortgage interest rate will stay the same throughout the life of the loan. If you plan to stay in your home for many years and prefer stability in payments, this is the loan for you!

We have 10, 15, 20 and 30-year options.

Depending on how much you can afford to pay each month, 10, 15 and 20-year fixed rate loans are more desirable for some homebuyers. You have significant interest rate savings throughout the life of the loan.

30-year fixed rate loans are our most popular program. Although you pay more in interest throughout the life of the loan, you have significantly lower monthly payments than our shorter loan options.

 

The payments will depend on your financial situation and the current market interest rates.

Contact EnTrust Funding to discuss your options!