Once you have purchased a home and are making monthly payments, you are in the process of building equity. In an effort to save money, you may find that a refinance is in order. A "rate and term refinance" refinances your existing mortgage at a better rate, (if rates have lowered since the time of your original mortgage), hence a lower payment.
A "no cash-out of equity refinance" allows for a loan amount that is no more than your current mortgage balance, plus 1% (to be applied to closing costs). Typically you are allowed the same loan to value ratios as purchases.
You could refinance the existing loan balance up to 95% of the property's value for mortgages under $214,600 and up to 90% of the value on mortgages over $214,600. |
