Section 3: Conventional Refinance Loan Benefits
Conventional Refinance Loan Benefits
A conventional refinance is simply a non-government backed loan used to refinance or replace an existing mortgage. Like conventional loans, a conventional refinance offers fantastic rates, lower costs, and greater flexibility than other programs.
You can use a conventional refinance loan to:
- Cancel FHA mortgage insurance.
- Refinance an FHA loan.
- Refinance another conventional loan.
- Refinance an adjustable-rate mortgage (ARM) into a fixed rate loan.
- Consolidate a first and second mortgage.
- Take cash out of your home’s equity.
1. No interest rate surprises
With a fixed-rate mortgage or a conventional loan, the interest rate won’t change for the life of your loan, protecting you from the possibility of rising interest rates.
2. The lowest fixed rate
Conventional mortgages may offer a lower interest rate and Annual Percentage Rates (APR) than other types of fixed-rate loans.
3. Fewer hoops to jump through
Conventional mortgages may require less documentation than FHA loans or VA loans, which could speed up the overall processing time.
4. Cost to refinance
If you’re curious about the costs associated with refinancing, use our mortgage refinance cost calculator to get an estimate of how much it will cost.
5. Net Tangible Benefit
The FHA actually requires that there be some advantage for the borrower if they go ahead with a Streamline Refinance. If refinancing makes it easier for you to make your monthly payments on time, then the FHA is off the hook for reimbursing your lender in the case of you defaulting on your mortgage. For a reduction in the term of the mortgage to be considered a net tangible benefit, certain things must apply. The remaining amortization period of the current mortgage bust be shortened, the new interest rate should not exceed the original one, and the principal, interest, and MIP payment of the new mortgage must not exceed the combined amount of the existing mortgage by more than $50.
Common Questions on Conventional Refinance Loans
- Are Conventional Refinance loans better?
Everyone has unique needs for their buying situation. Although Conventional Refinance loans are very competitive, they are not always the best choice for the consumer. Because of that we recommend you talk to your loan professional for your specific needs.
- Are there any benefits to sellers?
Conventional Refinance loan l loan buyers have the lease restrictions when it comes to buying and is typically a sought-after product when looking at offers.
- What are Orbit Realty’s and Orbit Home loans benefits?
With Orbit Realty you and Orbit home loans you get the benefit of working with a team that is highly trained and qualified. Okay, maybe every company says they have that, but the truth is that only 10% of companies nation-wide have both a real estate and mortgage company combined and because of that we are able to be one of the most competitive lenders on the market. We are also able to pass savings onto you buy not having to change additional fees that you often see with other lenders.
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