Refinance Your Mortgage

Refinancing at a Glance

Refinancing your mortgage is simply replacing your current mortgage with a new one. The new loan pays off the old loan, and you'll start making payments on the new loan. People refinance their mortgages for all sorts of reasons – including lowering their monthly payment, getting a better interest rate, taking cash out of their home, shortening their loan term, or a combination of the above.

LendingTree Can Help You Refinance

Just as you would shop around for your home, it's equally as important to shop around for your home loan – whether you're a first-time buyer or are looking to refinance your existing loan. At LendingTree, we make it easy by doing the shopping for you. By comparing lenders and having them compete for your business, you're certain to get the best rate possible on your mortgage refinance. The better your rate, the lower your payment will be and the more money you will save over the life of your loan.

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Benefits of Refinancing:

  • Lower your interest rate
  • Lower your monthly payment
  • Adjust your loan term
  • Convert a variable rate to a fixed rate
  • Take cash (equity) out of your home

Glossary Terms

HARP Program
The Home Affordable Refinance Program (HARP) was created by the federal government in April of 2009 to allow eligible homeowners with little home... <a href='/glossary/what-is-harp-program' title='See the full definition of HARP Program'>read more</a>
Cash-Out Refinancing
A refinance in which the new loan amount exceeds the total needed to pay off the existing mortgage. The difference goes to the borrower and can be... <a href='/glossary/what-is-cash-out-refinancing' title='See the full definition of Cash-Out Refinancing '>read more</a>
Rate and Term Refinancing
A mortgage refinance that replaces the existing mortgage with a new one but does not disburse cash to the borrower. Rate and term refinancing is... <a href='/glossary/what-is-rate-and-term-refinancing' title='See the full definition of Rate and Term Refinancing'>read more</a>
Refinance
Refinancing means replacing one loan with a new, better loan. Improving the terms of a loan can mean obtaining a lower interest rate, a lower monthly... <a href='/glossary/what-is-refinancing' title='See the full definition of Refinance'>read more</a>

Cash-Out Refinancing VS Traditional Refinancing

When you refinance your mortgage, you have two options: You can refinance your existing loan to a new loan with a new rate and term (known as a traditional mortgage refinance), or you can take out above and beyond what you owe on your current mortgage to put some extra cash in your pocket (also known as a cash-out refinance). Of course, if you do opt to take out cash from your home, your loan balance will be greater and your monthly payment will likely increase.

Reasons for Cash-Out Refinance Include:

  • Paying off credit card debt (or other high interest debts)

  • Purchasing a car

  • Making home improvements/repairs

  • Paying for college expenses

  • Creating an emergency fund

Reasons for Traditional Refinance Include:

  • Lowering your interest rate

  • Lowering your monthly payment

  • Adjusting your loan term

  • Converting from a variable rate to a fixed rate

How Much Does a Mortgage Refinance Cost?

Whenever you take out a new loan, you're going to pay fees and closing costs associated with that loan. A mortgage refinance is no different. Typically, you'll need to pay an application fee, a loan origination fee, an appraisal fee, and more. View all of the costs and fees of a mortgage refinance so you are aware of possible fees a lender may charge you. You can use our refinance calculator to determine your break-even point, or the point in which the savings on your mortgage will cover the cost of the refinance.

VA or FHA Refinancing?

There are many reasons why you may want to refinance your VA loan or your FHA loan. Reasons for refinancing your VA loan into another VA loan are very similar to a regular mortgage refinance – you want to get a lower rate, lower your monthly payment, cash out some of your equity, or change your loan term.

For those looking to refinance their FHA loan, the main reason to do so is to drop private mortgage insurance, or PMI. Since FHA loans require just a 3.5 percent down payment, lenders charge private mortgage insurance to mitigate risk. Once you have 20 percent equity in your home (whether by paying down your loan, home prices increasing, or a combination of both), you can refinance your FHA loan into a conventional loan and no longer pay PMI. Of course, if you don't have 20 percent equity in your home, you can always refinance your FHA loan into a new FHA loan (known as an FHA Streamline Refinance) to obtain a lower interest rate and monthly payment.

Mortgage Refinance Checklist

To refinance your mortgage, you'll need to have the following documents on hand:

Your identity: Social security card, photo ID

Your income: Last three pay stubs, W-2s for two previous years

Your assets: Retirement accounts, investments

Your debts: Bank statements for two previous months, credit card and loan statements, child support or alimony payments, homeowners insurance, property tax bills

Your creditworthiness. The lender will pull your credit report, but you can view your score for free on LendingTree to make sure it's where you expect it to be.

To see a complete checklist of the documents you'll need, view our mortgage refinance checklist.

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Home Loan Refinance Rates

Refinance rates now in Ashburn, VA [Change this]

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    Home Price (Purchase)
    When you get a mortgage to purchase a home, the lender uses the lower of the agreed-upon purchase price or the property's appraised value to determine your maximum loan amount. The loan amount divided by the property home price equals your loan-to-value ratio, or LTV. That ratio is one of the major factors that lenders use to set your mortgage rate. If your LTV exceeds 80 percent, you'll probably be required to pay mortgage insurance, which increases your monthly payment. If the property appraises for less than the agreed-on purchase price, you are not usually required to complete the purchase.
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    Home Value (Refinance)
    This is your estimate of the current value of your property. When you refinance, your home is almost always evaluated by a licensed appraiser. The refinance loan amount divided by the property's appraised value equals your loan-to-value ratio (LTV), and that number is one of the major factors that determine your mortgage rate. To get an accurate refinance rate quote, your home value estimate must be reasonably accurate.
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    Down Payment
    The down payment is the amount you pay upfront when you finance property. Your purchase price minus your down payment equals your mortgage amount. The higher your down payment, the more likely you are to be approved for a home loan. If your down payment is less than 20 percent of the purchase price, you'll probably be required to pay for mortgage insurance, which increases your monthly payment.
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    Credit Score
    Your credit score is a number designed to measure your credit-worthiness. It's based on a formula that combines many factors, including your payment history, amount of credit used and number of accounts. This number is used by lenders to calculate the probability that you'll default on your mortgage. Most lenders won't approve mortgages to applicants with credit scores lower than 620. Your credit score is one of the most important factors that determines your mortgage rate - applicants with higher scores are offered better mortgage rates.
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Mortgage rate quotes displayed on LendingTree LoanExplorer℠, including loan pricing data, rates and fees, are provided by third party data providers including, but not limited to, Mortech®, a registered trademark of Zillow®, LoanXEngine, a product of Mortgage Builder Software, Inc., and LoanTek, Inc.

Mortgage Refinance Calculator

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Monthly payments are an estimate and are for informational purposes. They do not represent a finance offer. Other tax, license, title, or fees may apply. Disclosures

Frequently Asked Questions