Author:
Jessica Bennet
Community Mentor

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Which Refinancing Option suits your situation?

Most people choose to refinance either to get a lower rate compared to what they have received on their existing mortgage or to modify the term of the loan. Besides, they often require extra cash for a variety of purposes and here's where refinance can help them to cash out their equity. This article gives you an idea of the following aspects of refinance:

5 ways to refinance your existing loan
Loan types to choose for refinance

5 Ways to refinance your loan

Rate and Term Refinancing
This allows you to borrow enough to clear your current mortgage balance. You can either modify the interest rate on your loan or change the loan term or you may adjust both. For instance, you may change to an FRM when the rate on your ARM is expected to move upwards within a short time. Or else, you may switch over from an FRM to a hybrid ARM if you plan to move out within a period of 2 to 3 years.

Cash-out Refinancing
This option leaves you with excess cash amount after you have paid off the current loan balance. You can thus extract cash proceeds from your home equity. Know more...

Streamline refinancing
Streamline refinancing refers to the documentation and underwriting carried out by a lender in order to find out if the borrower would qualify for a refinance loan. This is a kind of loan program does not require any credit verification. But it may or may not require an appraisal. There are two types of streamline refinances - one offered by the FHA and the other by the VA. Know more...

Mobile home refinance
You can avail mobile home refinancing loans in case you wish to in order to get a lower interest rate on your mobile home mortgage loan and enjoy making some savings out of it. You can opt for a Title I loan program provided the mobile home is your primary residence. There are some criteria which you need to fulfill in order to get a mobile home refinance loan. Know more about the eligibility criteria.

Low Credit Refinance
You may have a number of loans including credit cards, personal loan or even a mortgage and are not able to pay them off in the right time. This is when your credit score starts going down and now if you look forward to a refinance, you may be perceived as a low credit borrower.

However, inspite of low/bad credit, it is possible to qualify for a mortgage. But there are lenders who may require you to pay a higher rate of interest on the refinance loan compared to what you had to pay had your credit score been a favorable one. However, bad credit loans provide you with an option to rebuild your credit while you make regular payments on the refinance loan. At times, you do need these loans in order to consolidate and eliminate other debts, provided you take out extra cash through the refinance - the process being known as cash-out refinance. Know more on Bad credit refinance.

Now that you're aware of the different ways by which you can refinance your current loan, you need to decide upon the loan program that can fulfill your purpose of refinancing and help you save the maximum.

Loan types to choose for refinance

There are various loan options available in the market. You need to choose from the options depending upon your finances and the situation you are in. We have given a list of the situations and the loan options one may go for if he wishes to refinance.

Your Situation		Favorable Loan programs
Require cash		Home equity loan
Home improvement		Home equity loan/Line of credit
Need loan amount below $300,700		Conforming fixed rate loan
Need above $300,700		Jumbo fixed rate loan
Plan to stay beyond 5 years		Fixed rate loan
Wish to sell within 5 years		Adjustable rate of mortgage
Add a room or other improvements at home		Cash-out refinance
Buying a vacation home		30 year fixed rate

It's better if you can shop around and apply for mortgage quotes with a number of lenders. This will make you aware of the rates and trends prevailing in the market. It will give you an idea on what the mortgage rates are likely to be in the forthcoming days. You can then go for the right loan program keeping in mind your needs as well as what the market trends are likely to be in the near future.

Related Readings

How to refinance your current mortgage

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earl and margaret

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Posted: Thu Jan 26, 2006 7:07 am Post subject: refinance

do you refinance on a double wide mobile home almost 2 yrs. old. it sits on 2 acres of land, which is ours. thank you. Email removed as per forums rule

Samantha

Community Mentor

Joined: 16 Sep 2005
Posts: 1509
Location: MASSACHUSETTS

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Posted: Thu Jan 26, 2006 8:42 am Post subject: RE

Hi, Earl We can definately help you with the loan. I will process you request further to our loan department. They will look after it and get back to you soon. Thanks _________________ Know how to compare lenders with mortgage booklet

nancy chanley

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Posted: Fri Jan 27, 2006 6:05 pm Post subject: refinance

i'm looking to refi my manufactured home that sits on a city lot,less than one acre. can you help me?

Samantha

Community Mentor

Joined: 16 Sep 2005
Posts: 1509
Location: MASSACHUSETTS

131.42 Dollars($)

Posted: Fri Jan 27, 2006 6:21 pm Post subject:

Hi Nancy, Welcome to MortgageFit Forums. We shall require some more details on your score, income, debts and some more information on your home. We have a large network of lenders and definitely we would try our best to help you. I shall request you sign up here and put in your details or just leave your e-mail address or phone number here. This will be taken up by our customer care department for further reference. Feel free to post here if you have any more queries. We will be happy if we can help you. God bless you. For MortgageFit, Samantha _________________ Know how to compare lenders with mortgage booklet

Susan Demerath

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Posted: Thu Mar 02, 2006 3:34 pm Post subject: refinancing

Am looking for help, need to refinance, to consolidate debt

Samantha

Community Mentor

Joined: 16 Sep 2005
Posts: 1509
Location: MASSACHUSETTS

131.42 Dollars($)

Posted: Thu Mar 02, 2006 3:53 pm Post subject:

Hi Susan, Welcome to MortgageFit Forums. We are certainly going to help you. But we need some more details to help you like your credit score, financial status, debt to income ratio and current debts. It will help us to forward your requirement to our loan department to suggest you appropriately. You may leave your phone no. here so that we can give you a call and discuss. Also kindly signup with us here, so that we can contact you through e-mail and you can freely disclose your requirement. Feel free to post if you have any more queries. We will be happy if we can help you. God bless you. For MortgageFit, Samantha _________________ Know how to compare lenders with mortgage booklet

pat

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Posted: Thu Jul 27, 2006 6:32 pm Post subject: refinancing manfactured home

I would like to refinance my home but it is a 1974 model, other sites state that it has to be a 1977 model or newer. Can you help?

Jessica
Jessica

Community Mentor

Joined: 08 Jun 2004
Posts: 693
Location: OHIO

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Posted: Thu Jul 27, 2006 9:14 pm Post subject: RE: 1974 Mobile home refinance

Hi, Welcome to MortgageFit forums. It is possible to refinance a mobile home having a 1974 model. It is true that most lenders offer refinance loans for the 1976 model and onwards. But if you shop around, you will be able to find out lenders offering home loans to refinance the 1974 model. Our Community also has a group of ranked lenders offering various loan prgrams for different kinds of properties. If you are interested in a refinance loan, go for a no obligation free loan sign up with us. Also, check out this section to find out how we follow up after you have signed up with us. You can also go through our lenders directory and search for the lender of your choice. Regards, Jessica. _________________ Home buying made simple with Community booklet

corry shannon

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Posted: Tue Aug 29, 2006 1:02 pm Post subject: Refinancing

Does refinancing your home improve your credit score?

Elwood

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Posted: Tue Aug 29, 2006 1:19 pm Post subject:

Hi Corry, If your credit score isn't good then it is not very probable that you will qualify to refinance for any low rate mortgage. So refinancing at that stage when you have not improved your credit score won't help you much by way of a refinance. Thanks

blue

Joined: 21 Oct 2005
Posts: 1138
Location: MARYLAND

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Posted: Tue Aug 29, 2006 1:50 pm Post subject:

Hi Corry, You can have a look at this page on ways you can improve your credit score. Thanks Blue _________________ Lets help each other. Try my blog

Caron

Moderator

Joined: 19 Jul 2005
Posts: 1428
Location: florida

240.05 Dollars($)

Posted: Tue Aug 29, 2006 11:02 pm Post subject: RE: Can refinance improve credit score?

Hi Corry, Welcome to the forums. For a short term, refinancing can bring the credit score down, as there can be inquiries on your credit report when you apply for new credit. But the fact is that, creditors consider the inquiries only if you have applied for too many accounts at a time. I guess you haven't done so, therefore refinancing will not have a negative affect on your score. Rather if you can pay off the loan in time, your credit score will improve. Refinancing is a good option to make up for late payments or missed payments, if any, and get back on track. This helps to build up good credit. Thanks, Caron.

sara

Joined: 05 Jul 2006
Posts: 1168
Location: New Brunswick, New Jersey

216.67 Dollars($)

Posted: Tue Aug 29, 2006 11:07 pm Post subject: RE: Refinance to improve credit score

Hi, Refinance means you are trying to find out a way by which you can pay off existing debts, so lenders and credit bureaus consider it as your effort to get rid off the current debts. They feel that you are at least making some effort to make the payment in time. So, you may carry on with it. Thanks, Sara.

Rosecile

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0.10 Dollars($)

Posted: Thu Aug 23, 2007 7:50 am Post subject: refinance

Hello With the economy. Is this a good time to refinance. My home was valued two years ago at 291,000, now it's value is appraised at 240,00. We would like to refinance again, but the interest will be at 6.7 instead of 5.6 which is waht we had before. Would it be better to take out at second mortgage instead of have a mortgage of $350.00 more.

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