Refinancing Conventional loans is easier today than ever. There are several types of refinance transactions;
In most cases the documentation needed to complete the transaction is streamlined. Usually one current paystub and a bank statement (if not financing closing costs) is all that you are asked to provide for loan approval.
You should also have the following items;
- Copy of Warranty Deed
- Copy of Title Insurance Policy
- Copy of Homeowner's and Flood Insurance Policy
- Copy of Survey of Property
- Copy of Mortgage Payment Coupon
In addition, FHA has an Interest Rate Reduction Loan which makes refinancing FHA loans simple. Often times little to no documentation is required and the cost is a fraction of the costs when purchasing. This is contingient on the loan amount of the refinance as compared to the original loan/purchase price. If the new loan would not exceed the original loan no appraisal or borrower documentation is required. Also, if the property being refinanced is a single family residence, you may be eligible to receive a rebate on the upfront MIP originally charged.
"Rate and Term" refi is simply a transaction to either reduce your current rate or change the amortization from a 30 year to a 15 year loan (or vice versa).
"Cash Out" is used to take equity out of your property. You are limited to the amount of equity you may take out but no requiremnets are made as to the use of the cash received.
"Bridge Loans" are to take equity out of your property for the sole purpose of purchasing another property. This is a temporary loan which will require the sale of the property securing the bridge as well as stipulate end financing for the new property.
"Home Improvement" loans are cash out financing for the purpose of home improvement. What makes this loan different from a simple "cash out" is that the home is appraised as though the improvements are completed, allowing you o take out equity that may not yet be present in the current state of the property. The funds are then held in escrow and only released when construction is completed.
