A refinance is the process of paying off any existing mortgages on a home with a
new mortgage loan. We also consider the current owner's placement of financing on
a property that is not financed as a refinance transaction. The loan to value is
based on the appraised value of the property regardless of the date the property
was purchased and initially financed.
There are typically two types of refinance – rate/term refinance and cash-out refinance
– and each achieves a different purpose.
Rate/Term Refinance
The purpose of a rate/term refinance is to change to a lower interest rate or change
the term of a loan without advancing new money on the loan. Closing costs can be
rolled in. The borrower may receive a maximum of 1% of the loan amount in cash at
closing.
Cash-Out Refinance
The purpose of a cash-out refinance is to take cash out/away from the refinance
by advancing new money on the loan. The cash taken from the refinance may be used
for any purpose you choose(1) (debt consolidation, credit card payments,
vehicle purchases or the purchase of the investment property, for instance). Closing
costs can be rolled in. For example:
$100,000 loan amount
$50,000 amount to be paid remaining on the loan
$75,000 refinance amount
$25,000 excess, cash-out to use for whatever purpose
Review the types of loan programs available for refinance.
(1) If the borrower received more than 5% of the loan proceeds in
cash at closing, he/she may be required to provide a letter explaining the purpose
of the cash-out.
The home loan experts at INTRUST have the experience to understand the best options
for you based on your current situation as well as the flexibility & know-how to
tailor the right products to meet your individual needs. For more information about
these and other home loan programs, or to learn about which choices might be right
for you, contact Customer Service by