Refinance Loans
A conventional refinance allows you to replace your existing mortgage with a new loan that better fits your current financial goals. Whether you're looking to reduce your monthly payment, switch from an adjustable to a fixed rate, or tap into your home's equity, conventional refinancing offers flexibility and competitive terms.
Why Refinance?
Refinancing your conventional loan can help you take advantage of lower interest rates, potentially saving you thousands over the life of your loan. You can also adjust your loan term—shortening it to build equity faster or extending it to lower monthly payments. Cash-out refinancing lets you access your home's equity for major expenses like home improvements, debt consolidation, or education costs.
Conventional refinancing typically requires a credit score of at least 620, though better rates are available with higher scores. You'll need to provide documentation of your income, assets, and employment. Most lenders prefer a debt-to-income ratio below 43% and may require an appraisal to determine your home's current value. If you have at least 20% equity, you can avoid private mortgage insurance (PMI).
Benefits of Conventional Refinancing
- Competitive interest rates for borrowers with good credit
- Flexible loan terms from 10 to 30 years
- No upfront mortgage insurance premium unlike FHA loans
- Higher loan limits than government-backed programs
- Cash-out options to access your home equity
Is It Right for You?
If you have good credit, stable income, and significant equity in your home, a conventional refinance could save you money and provide financial flexibility. The best candidates typically see at least a 0.75% to 1% reduction in their interest rate, making the closing costs worthwhile.
Ready to explore your refinancing options? Contact us today for a personalized rate quote and to see how much you could save.
Key Features of Conventional Loans
Not Government-Insured
Unlike FHA, VA, or USDA loans, but meet Fannie Mae/Freddie Mac guidelines
Better Rates & Terms
Typically lower rates and fees than other loan types
5% Minimum Down Payment
Options for qualified borrowers with good credit
Flexible Property Types
Primary residence, second home, or investment property
Frequently Asked Questions
Conventional loans are not insured by the government, while FHA, VA, and USDA loans are government-backed. Conventional loans typically offer better rates and terms but have stricter qualification requirements regarding credit score and down payment.
Yes, one of the benefits of conventional loans is that PMI can be removed once you reach 20% equity in your home. You can request PMI removal once you reach 20% equity, and it's automatically removed when you reach 22% equity.
Not necessarily. In fact, if you are a reasonably astute shopper, you will probably do better dealing with a mortgage broker. Mortgage brokers do not add any net cost to the lending process, because they perform functions that would otherwise have to be done by employees of the lender. Furthermore, because mortgage brokers deal with multiple lenders -- in a typical case, 25 to 30, sometimes more -- they can shop for the best terms available on any given day. In addition, they can find the lenders who specialize in various market niches that many other lenders avoid, such as loans to applicants with poor credit ratings, loans to borrowers who do not intend to occupy the property, loans with minimal or no down payment, and so on.
Looking for a Conventional Loan?
Our mortgage experts are ready to help you find the perfect conventional loan option for your needs.