Loan Options

What is a Refinance Loan?
Refinancing is the process of paying off an existing loan by taking a new loan and using the same property as security. Homeowners may refinance to reduce their mortgage payment if interest rates have dropped to switch from an adjustable to a fixed rate loan if rates are rising or use equity for extra cash.

Rate Term Refinance
This option allows you to refinance the remaining balance on your current loan, which means you can take advantage of lower interest rates or a shorter term. A rate-and-term refinance is ideal for anyone looking to pay off their mortgage sooner, build equity faster, or save money overall. And really, who wouldn’t be interested in doing those things?

Cash-Out Refinance
This option involves taking out a mortgage greater than the remaining balance on your current loan; this allows you to use your equity as a cash advance to put toward home renovations or other expenses. A cash-out refinance is ideal for anyone who has built some equity and is looking to make major home improvements, pay off credit card debt, or make a large purchase. The cash out limit in Texas is 80% of the loan-to-value of the property.

Reasons to consider refinancing:

• Your credit has improved, meaning you may be able to get a better rate even if rates haven’t gone down.
• Your financial situation has changed. Have you changed careers or received a salary increase?
• You’re looking to consolidate your other types of debt, like another mortgage, student loans or car loans.
• You’re thinking about making home improvements or repairs that could become
• You want to take advantage of low interest rates.

Benefits of refinancing a home loan
Refinancing presents a great opportunity to get a new mortgage that’s better suited to your current lifestyle and financial position. Some of the major benefits of refinancing include:

Reduced loan terms
Refinancing will also update your loan terms. This can mean moving from a 30-year loan to a 25-year loan so that you can pay off the loan and own your home quicker. By reducing your loan terms, you are also lowering the amount of interest you must pay your lender.

Lowered monthly payments
When you finalized your initial loan terms, you agreed on a specific interest rate attached to the borrowing amount. Refinancing involves lowering that interest rate, and reducing the amount of money you owe on the monthly principal.

Long-term savings
With lower monthly payments and a reduced interest rate, refinancing can bring substantial long-term savings. Plus, consolidating all your debts when you refinance can make it easier to manage your finances.

FHA Refinance
FHA refinancing is a home loan intended to pay off an old home loan and start a new one on the same property. Refinancing loans can include FHA-to-FHA refinancing or conventional-to-FHA refinancing.

The Federal Housing Administration has also made it easy to refinance an FHA loan.

• Limited credit or income documentation required to qualify
• Limited employment documentation required
• No property appraisal required

FHA Rate Term Refinance Items to Review

• Loan must be current
• New loan may include any accrued late charges/escrow shortages
• Any cash back to borrower at closing may not exceed $500
• Prepaid expenses may include per diem interest to end of month on new loan, hazard insurance premium deposits, monthly MIP premium deposits and any real estate tax deposits needed for new escrow account, regardless whether mortgagee refinancing the existing loan is also the servicing lender for that mortgage
• Simple refinances do not permit the paying out of equity to an ex-spouse or the payoff of subordinate liens; if either of those situations is required, the loan must be treated as a regular rate/term refinance and registered under the appropriate standard FHA product (not the Simple Refi product)

FHA Streamline Refinancing

• Seasoning: at the time of loan application, the borrower must have made at least six payments on the FHA-insured mortgage being refinanced
• Full Credit / No Appraisal Streamline Refinance – credit is used to qualify for the loan with no new appraisal being required. The new loan is approved with the appraised value on the original loan approval
• Payment history: for mortgages with less than a 12-month payment history, the borrowers have made ALL payments in the month due; for mortgages with a 12-month payment history or greater, no more than 1 x 30 in the past 12 months AND 0 x 30 for the three months prior to loan application

VA Streamline

• VA Refi– The Veterans Administration Home Loan offers a streamline refinance program that helps lower current interest rate by refinancing an existing VA mortgage.
• IRRRL – Interest Rate Reduction Refinance Loan. This either lower the current interest rate or converts an Adjustable Rate Mortgage (ARM) to a fixed-rate mortgage.

IRRRL is VA to VA refinance and it will reuse the entitlement that was originally used by the veteran in the original loan approval. Under a Interest Rate Reduction Refinance Loan a new Certificate of Eligibility (COE) is not required.

Conventional to VA Loan Refinance
Veterans with mortgages that are currently conventional, FHA, USDA, or another loan type may be able to refinance to a lower rate and payment using their VA Loan benefits.  VA Loan rates are very competitive and do not have to pay monthly private mortgage insurance as part of their payment.

With improvements to the market values of homes in Texas, many homes now appraise for amounts higher than the previous purchase price.  If in the past you have been turned down because the appraised value was not high enough please contact us for a new review our your options.  In many cases, we can use an automated valuation to quickly determine if the home is likely to appraise for an amount required to refinance. Refinancing your mortgage loan will help you save thousands in saved payments and accrued interest on the loan.

Who is Eligible for a VA Refinance Loan?

• Active-duty military
• Veterans
• Reservists and members of the National Guard
• Some surviving spouses of veterans

What are the Benefits of a VA Refinance Loan?

• No penalty fee if you pay the loan off early
• Lower your payment
• Shorten the term
• No private mortgage insurance requirements
• FICO as low as 600

How do we start the process for a VA Refinance?
To apply for a VA-sponsored loan, you need to obtain a Certificate of Eligibility (COE). Your COE verifies to lenders that you meet the requirements necessary to obtain a VA-sponsored loan. Texas Premier Mortgage is an approved VA Lender and can you get this document by supplying your DD-214. Applying for a COE is straightforward and can be done online, through the mail, or through a lender.

USDA Refinance Mortgage Loan
If you have a USDA mortgage loan and are interested in saving on your mortgage payment, consider a USDA refinance as the first option. This could be a great program to reduce your monthly payment.

Qualifying for a USDA refinance is an easy process. You may be eligible for a USDA refinance if:

• Primary Residence (second home and investment properties are not allowed)
• The home is financed with a USDA Direct Home Loan or a USDA Guaranteed Home Loan
• You have made your monthly mortgage payments on time for the previous 12 months
• Your new payment will have decreased after refinancing

Added benefits – no new appraisal is needed, property inspection, or credit report. Plus, you can even include your closing costs and escrow charges in the new loan amount – meaning you don’t owe anything upfront if you qualify.

Call us to find out which USDA refinance option could be right for you:

• USDA Streamlined-Assist refinance
• Standard streamline refinance
• USDA non-streamline refinance