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… and why it’s easier with Rapid Refinance
Refinancing is a unique home lending option for homeowners. Unlike other options like home equity loans and HELOCs, refinancing replaces your existing mortgage. That means you can qualify for better interest rates than you can with other equity options. Lower rates mean more savings and more long-term financial stability because you still only have one mortgage payment to cover in your budget.
But just like home equity loans and lines of credit, you can tap valuable equity in your home that you can use to achieve a variety of financial goals.
There are two ways to refinance your mortgage.
With a rate-and-term refinance, you are simply replacing your current mortgage with one that has a better interest rate and terms. You can:
Rate-and-term refinancing will not touch the equity you have built up in your home.
By contrast, cash-out refinancing allows you to access the equity you have built up in your home. You can also improve the interest rate and terms with this type of refinancing, but you can also cash out up to 80-90% of the equity available in your home.
Let's say that your home is worth $300,000, and you have a remaining balance of $150,000 on your mortgage. You could get up to $90,000-$120,000 from refinancing your home. This will increase the balance of your mortgage. However, it can give you the cash you need at a much lower interest rate than you could get through other lending options in many cases.
There is no requirement to take the total amount of available equity that you can borrow. So, you can decide how much money you need and borrow up to that amount.
Rapid Refinance makes refinancing your mortgage easy by matching you with lenders that fit your needs and goals. We do that by quickly running you through all the questions you need to answer to find the best lender for your needs.
You take two minutes to answer some questions, Rapid Refinance matches you with the right lenders that can provide the refinancing you need. Once you complete the form, we will instantly match you with lenders.
We have lenders that specialize in helping people with unique financial needs, whether it’s a loan to consolidate debt or refinancing for bad credit.
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Since this loan is a first mortgage instead of a second, it offers lower interest rates than home equity loans and HELOCs. First mortgages have some of the lowest rates possible on consumer financing, so it’s a cost-effective way to get cash. Even better, if you refinance at the right time, you can lower the interest rate compared to your original mortgage. This way, you save money as you pay off your home.
Mortgage interest is often tax-deductible, meaning you can lower your tax liability each year by deducting the interest you’ve paid. If you’re using part of the money you cash out to pay off other debts, you get a tax break in addition to lower APR. No other debt offers this kind of interest deduction.
With a mortgage, you know what to expect. You enjoy fixed monthly payments because it’s an installment loan. This offers advantages over financing like HELOCs, where the payments increase significantly after the 10-year draw period.
If you use the equity you receive to pay off things like credit card debt, you will decrease your credit utilization ratio. This measures the amount of credit card debt you have relative to your total limit. Paying off debt with equity may lead to a credit score boost. The trick is not to run up new balances!
Unlike basic refinancing where your balance remains the same, a cash-out refinance modifies your mortgage. The principal is higher because it includes the equity you cashed out. So you have more mortgage debt to pay off. If you are nearing retirement, this can put you at a disadvantage. Owning your home free and clear as you retire gives you more security.
Refinancing is not cheap. Closing costs amount to 2-5% of the new mortgage. If you get a $200,000 mortgage, the costs may total up from $4,000 to $10,000. Make sure that the equity you’re taking out AND the interest rate savings you may get are worth that cost.
If you borrow up to 90% of your equity (or anything over 80%) then you will need to pay private mortgage insurance (PMI). The lender will require this until you make enough payments to reach 80% CLTV.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Consectetur adipiscing elit.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Consectetur adipiscing elit.
Since this loan is a first mortgage instead of a second, it offers lower interest rates than home equity loans and HELOCs. First mortgages have some of the lowest rates possible on consumer financing, so it’s a cost-effective way to get cash. Even better, if you refinance at the right time, you can lower the interest rate compared to your original mortgage. This way, you save money as you pay off your home.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique.
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