Use a conventional mortgage refinance to achieve your financial goals, from getting cash out and consolidating debt to lowering your interest rate and monthly payment. We are a leader in conventional refinancing in Utah. Learn how you can benefit from a conventional refinance with our help.
Conventional loans are the most common types of mortgages. These loans are not backed by a government agency and are originated and serviced by private mortgage lenders such as banks, and credit unions. They are then sold to government-sponsored enterprises like Fannie Mae or Freddie Mac.
While conventional loan backing is not as explicit as FHA loans, because conventional loans have an implied government guarantee when they are sold to Fannie Mae or Freddie Mac, rates for these loans are often low. You can take advantage of these low rates with a conventional refinance.
Conventional refinance loans are a flexible tool that allows home buyers to accomplish a broad range of finance goals. Here are a few of the most common reasons you may want to take advantage of a conventional refinance.
A conventional refinance can be used to take advantage of equity you already have in your home. For example, if your home is worth $500,000 and you have $150,000 in equity, you could potentially do a conventional refinance loan for $400,000 and receive $50,000 cash out.
This new conventional loan will replace your previous loan and you can use the cash you received at closing for college financing, home improvements, or debt consolidation. You could even use this cash to put a down payment on a second home or rental property.
Most first-time home buyers choose government-backed loans due to their flexible down-payment and credit score options. Although FHA and USDA loans offer these benefits, they also require borrowers to have mortgage insurance to lower the risk to the lender.
Once borrowers have at least 20% equity in their home, they can remove this insurance premium by replacing their FHA or USDA loan for a conventional one through a conventional refinance.
Find out how much you could save by removing mortgage insurance from your monthly payment.
Many borrowers who choose to do a streamline refinance must refinance to the same type of loan they already have. For example, to do a VA streamline refinance, you must already have a VA loan. A conventional refinance can be beneficial because you can refinance any type of loan to a conventional loan.
This includes FHA, VA, USDA, Sub-prime, Option ARM, Alt-A, Standalone second mortgage, and First and Second mortgage combo loans. There are typically no restrictions on your current financing type to use a conventional refinance.
If you meet the equity requirement of 20%, there are several benefits you can reap from a conventional refinance. You can lower your monthly payments by removing mortgage insurance, getting a lower rate, or consolidating expensive debts after getting cash out.
If you don’t have 20% equity, you can still do a conventional refinance and possibly benefit from a lower rate, but you may still need to pay private mortgage insurance. Find out your options to avoid paying private mortgage insurance by consulting with a loan officer.
In order to be sure which option is best for you, speak with our helpful loan officer staff for today’s rates and a personalized quote. Don’t miss out on taking advantage of this unique and beneficial refinancing option.