Refinancing Your Home with a Conventional Mortgage

Refinancing Your Home with a Conventional Mortgage

Conventional mortgage refinancing offers a straightforward option for homeowners looking to change their loan terms or use their home equity. Explore your options below.

Refinancing Your Home with a Conventional Mortgage

What Is Conventional Mortgage Refinancing?

Conventional mortgage refinancing is a standard loan restructuring program that can:

Be used for a wide variety of property types

Conventional refinancing can be used for various types of properties, including condominiums, vacation homes, multi-family homes, and more.

Eliminate private mortgage insurance (PMI)

If you've accrued at least sufficient equity in your home, conventional mortgage refinancing can be used to eliminate private mortgage insurance (PMI) and make your monthly payment more manageable.

Support jumbo loan amounts

If you live in a high-cost area or own a luxury property, you can use conventional mortgage refinancing to borrow more than conforming limits allow.

What Can Conventional Mortgage Refinancing Be Used For?

To update your mortgage terms 

Refinancing a conventional loan lets you adjust the terms of your mortgage to better fit your financial circumstances and goals.

To remove a co-borrower

Refinancing allows you to remove a co-borrower from your home loan. This creates a new mortgage in your name only, which gives you full control over the property.

To tap into your home equity

Cash-out refinancing lets you use home equity by taking a new loan larger than your current mortgage and giving you the difference in cash.

NYFTY Lending Loan Pros

Pros

  • No private mortgage insurance (PMI) with sufficient equity
  • No government restrictions
  • Can be used for multiple property types
  • Allows for cash-out refinancing
  • Multiple loan options available
NYFTY Lending Loan Cons

Cons

  • May have stricter eligibility criteria and equity restrictions
  • A professional home appraisal is required
  • Offers limited flexibility for complex financial situations

Talk to our mortgage experts today about finding the right loan for you.

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Alternatives to Refinancing with a Conventional Mortgage

FHA Refinancing

  • Insured by the Federal Housing Administration
  • Higher Loan-to-Values (LTVs) allowed
  • Includes cash-out and streamlined rate-and-term refinancing options for simplified processing
  • Ideal for borrowers with less-than-perfect credit
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USDA Loan Refinancing

  • Offers competitive interest rates
  • May allow higher LTVs than FHA and conventional programs
  • Limited to properties in rural and suburban areas
  • Backed by the United States Department of Agriculture (USDA)
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Reverse Mortgages

  • Available to senior borrowers
  • Accesses home equity without monthly payments
  • Payments are deferred until the property is sold
  • Allows seniors to age in place  
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How Do I Know If Refinancing with a Conventional Mortgage Is Right for Me? 

Your refinance falls within conforming loan limits

Conventional refinancing may be an affordable option for mortgages within Fannie Mae and Freddie Mac’s loan limits.

You’re refinancing a government-backed mortgage

If you currently have an FHA or USDA loan, switching to a conventional mortgage can eliminate requirements like mortgage insurance, especially if your credit and equity have improved.

You want to eliminate private mortgage insurance (PMI)

If you have sufficient equity in your home, refinancing with a conventional mortgage lets you eliminate PMI. This can make monthly payments manageable and free up money for other goals.

When Is the Best Time to Use a Conventional Mortgage Refinancing? 

The best time to use conventional mortgage refinancing is when you’ve experienced a major life change. For example, significant life events like getting married or divorced, having a child, or downsizing for retirement are the perfect time to restructure your payments to fit your new responsibilities. Refinancing to a conventional mortgage at this stage can improve your loan terms and give you more financial flexibility and peace of mind during this new chapter.

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FAQ

While streamlined refinance programs are more commonly associated with government-backed loans, like FHA or VA, there are some simplified conventional options for eligible borrowers. For instance, Fannie Mae’s RefiNow™ and Freddie Mac’s Refi Possible® can help qualifying homeowners secure better terms with fewer hurdles.
Most homeowners need an appraisal to determine their home’s value and loan-to-value (LTV). Some may qualify for an appraisal waiver if they meet Fannie Mae or Freddie Mac criteria.
You may be able to roll a second mortgage or HELOC into a conventional refinance through a cash-out or limited cash-out option if you have enough equity to meet the guidelines of the program you choose. 
You can, but refinancing may not be worth it if you’re selling soon. Closing costs and a longer repayment term could outweigh any short-term benefits.
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