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.
What Is Conventional Mortgage Refinancing?
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.
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
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.
Alternatives to Refinancing with a Conventional Mortgage
- 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
- 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)
- Available to senior borrowers
- Accesses home equity without monthly payments
- Payments are deferred until the property is sold
- Allows seniors to age in place
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?
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FAQ
Are there streamlined options for conventional mortgage refinancing?
Will I need an appraisal to refinance?
Can I combine a second mortgage or HELOC with my primary loan?
Can I refinance if I’m selling my home?
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