Refinance Your Michigan Home
What is a Refi?
What is refinancing? Simply put, it’s getting a new mortgage to replace your current one. When you refinance, your new loan will be paying off your original loan while your new monthly payment will be based on the new rate and terms you lock in.
One type of refinance is a cash-out refinance. The maximum loan amount for this type of refinance is 80% of the appraised value of your home. This product allows you to capitalize or “cash in” on the equity you’ve built, then use it toward cool things like college tuition, weddings, a new car, and more.
Now’s the time to refi to achieve lower monthly payments; we’re the lender who makes it easy, so talk with one of our crew members today and start the process!
Why Refinance Your Mortgage?
There are many benefits when you refinance your mortgage In Michigan! Here are a few reasons:
Eliminate private mortgage insurance (PMI)
Mortgage insurance often adds 1-2% of the loan value over the lifetime of your loan, and may be a result of a small down payment or an FHA mortgage. One of the benefits of refinancing is removing mortgage insurance, which may save you money in the long run! When you refinance out of an FHA loan, you may be able to remove PMI!
Shorten the term of your loan
The 30-year home loan is the most popular loan term. By refinancing, you have the option of changing the length of your loan term!
Even if you have 20 years remaining in your current loan, refinancing to a lower interest rate may allow you to shorten the loan term without increasing your monthly payment. Score!
Lower your monthly payment
Depending on your interest rate and term, you may be able to reduce your monthly payment! There are multiple ways to reduce your payment, but the most common methods are reducing your interest rate (and keeping your term), extending your loan term, and/or removing PMI (private mortgage insurance) from your loan.
Refinance from an adjustable rate to a fixed rate
Depending on your financial situation, it may be advantageous to refinance your mortgage in Michigan from an adjustable rate loan to a fixed rate loan (or vice versa). See if this is a good idea for you!
Cash out equity from home for large expenses
This is one of the best features of a refinance—the option to tap into your home’s equity! The equity of your home is its value minus your remaining loan balance (e.g., if your home is worth $300,000, and you have $100,000 remaining on your loan balance, your home’s equity is $200,000).
Cash-out refinances in Michigan are great for consolidating high-interest debt, paying for remodels, college tuition, weddings, or purchasing an investment home.
How does Refinancing Work?
When you refinance, your original home loan is replaced with a new one— that’s it! The difference in loan terms, amounts, and interest rates determine if you can take cash out, reduce your monthly payment, or shorten your loan term— sometimes all of the above!
Many Michigan refinances require an appraisal or an inspection to move forward with the transaction, just like your original loan may have required. Some home loan refinances, known as a streamline refinance, do not have as many requirements, including home inspections or credit inquiries. Your loan officer will have more information on the requirements for your home loan refinance in Michigan.
Things to Consider When Refinancing Your Michigan Home Loan
Michigan refinances frequently require appraisals, inspections, credit inquiries, and other fees. That said, these fees may be covered by your home’s equity in a cash-out refinance.
Additional things to consider when refinancing:
- Your refinance interest rate is determined by today’s rates— not your current loan’s rate.
- Applying for a home loan refinance may result in a credit inquiry. This is normal!
- You must continue paying on your current home loan until it is completely paid off at the refinance loan closing.
How do I know when to Refinance?
It completely depends on your home’s equity and your desired loan terms.
If you intend on cashing out your home’s equity, you’re able to proceed with the transaction when you have much greater than 20% home equity. This is because the maximum refinance amount is 80% of your home’s value.
If your refinance is non-cash out, you and your loan officer will have to determine if it’s financially advantageous to refinance. Typically, if refinancing for a lower rate, a rate decrease of 1-2% or more may make refinancing worthwhile.
How Much Does it Cost to Refinance your mortgage in Michigan?
Most Michigan refinances share the same closing costs (appraisals, title fees, etc.) which amounts to a small percentage of the loan amount. We’ll help you find Michigan mortgage and refinance rates well below the national average so you can apply and start saving on your home today.
How many months do you have to wait to refinance a home?
In many cases, there is no waiting period to refinance your mortgage. However, you must wait six months after your most recent closing (usually 180 days) to refinance your mortgage if you’re taking cash–out.
Does refinancing hurt your credit?
Like all credit inquiries, refinancing may play a role in short-term credit score calculations. Refinancing can significantly lower your debt amount and/or your monthly payment, which is beneficial for your credit. In short, don’t worry about your credit!
I just changed jobs, is that ok?
If you change your employment prior to an active mortgage transaction, be sure to notify your Loan Officer so that they can update your pre-approval. If you change your employment during an active mortgage transaction, you will want to inform your Loan Officer ASAP to ensure that you are still qualified for the mortgage. Your Loan Officer will contact your employer prior to closing to confirm your employment so be honest and up-front with any employment changes as you don’t want any surprises at the last minute.
How do I avoid paying PMI (private mortgage insurance)?
To avoid PMI on a conventional loan, you must have 80% or lower loan to value ratio. In other words, you must have 20% equity or greater. There are options to avoid paying PMI monthly; you can ask your Loan Officer about these options.
How do I Refinance my Michigan Mortgage?
To refinance your mortgage, get in touch with a loan officer! They want the best for you and your financial health and will be able to guide you through the entire process, from start to end!
Feel free to start filling in our application below!