A conventional refinance is the most common choice for homeowners today because home equity is returning in most markets. These mortgages are backed by the agencies Fannie Mae and Freddie Mac. These agencies purchase loans that meet their standards based on credit score, loan-to-value, and type of property.
When shopping for a refinance, your rate is based on your situation. The interest rate offered to you will adjust based on factors in your loan file; these adjustments are called loan level price adjusters or LLPAʼs. For example, a borrower refinancing an investment property will receive a higher rate than a consumer refinancing a primary residence, and someone with a 640 credit score will receive a higher rate than someone with a 740 credit score.
There are many reasons why homeowners refinance:
- To obtain a lower rate
- To shorten the term of their mortgage
- To convert from an adjustable rate to a fixed rate
- To eliminate private mortgage insurance (PMI)
- A combination of all the above
Deciding on whether to refinance can be confusing. You must take into account many factors. Allow one of our licensed mortgage experts to assist you and get a quote with no obligation to proceed. Click below to get started today