Refinance your home loan

Refinancing your current mortgage may be a lot easier than you think. And we can help you every step of the way. Each feature of our refinance page was built to empower you - the homeowner - in your quest for a better home loan.

Whether you're looking to lower your monthly payment or just explore your options, we have plenty of useful tools that can help you refinance with confidence.

So let's get started!
 

Top 5 reasons to refinance

No cost, no money down or closing cost

If you can find a no-cost mortgage that's better than your current loan, you should ALWAYS refinance. Otherwise, consider the benefits of refinancing to make sure it's worth it for you.

Lower your monthly payment

Lowering your monthly payments can loosen the belt on your household budget and allow you to focus on some other changes you might want to look into – like switching to a fixed-rate mortgage. Your lender will be able to help you address all the variables.

Lower your interest rate
If you’re not significantly paying down the principal, you could be throwing money away. By lowering your interest rate, you could conceivably pay off your mortgage faster while you’re chipping away at that principal, too.
Convert an ARM to a fixed-rate mortgage
Rather than waiting for the inevitable rate hike when your ARM matures, why not get locked into a rate you’re comfortable with right now? It pays to look into this so you’re not overpaying and overextending your budget.
Trade home equity for cash
If you’re 20 years into a 30 year loan, it might seem like a great idea to do a cash-out refinance. After all, the rates are usually lower. But you also need to consider that a loan of that maturity is likely paying a lot towards the principal. Make sure you do what’s best for you in the long term.

What is mortgage refinance?

Refinancing is the process of paying off your existing mortgage with a new mortgage. Typically, you refinance your mortgage to reduce your interest rate and monthly payment or change the length (or term) of your mortgage. You may also refinance to take cash out from your home's equity.

Glossary Terms

HARP Refinance
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-refinance' title='See the full definition of HARP Refinance'>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>
Refinancing
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 Refinancing'>read more</a>

Refinance rates now in Woodbridge, NJ[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.

30 Year Fixed

Interest Rate
3.500%
APR
3.612%
Monthly Payment
$450
Consumer Direct Mortgage, a division of FirstBank
30 Year Fixed
Interest Rate
3.500%
APR
3.612%
Monthly Payment
$450
(855) 997-1714 Contact
Consumer Direct Mortgage, a division of FirstBank
Email Lender

Offer Details

Home Value $200,000
Requested Loan Amount $100,000
Lock Period 30 Days
Down Payment $0
Principal and Interest Payments $450
Estimated Mortgage Insurance Payments $0
Total Monthly Mortgage Payment $450
Lender Fees $1,378
Lender Credit $0
Total Closing Fees* $1,378
*Other 3rd party fees may apply
Consumer Direct Mortgage, a division of FirstBank
Email Lender

About the Lender

At Consumer Direct Mortgage, we know that each customer has specific needs, so we strive to meet those specific needs with a wide array of products, investment tools, mortgages and best of all quality service and individual attention.You are our priority and we know that superior service, delivering what was offered, coupled with the lowest overall cost is the way to keep you as a customer for life. In a lending environment where everyone is offering the same core products and programs, we know that we have to separate ourselves with an unwavering commitment to services and delivering the lowest overall total cost to close every day. Our sales and operations team is comprised of veteran Mortgage Professionals that are committed to this philosophy and understand what it takes to get the job done on time and at the agreed upon terms and conditions presented.
Consumer Direct Mortgage, a division of FirstBank
Email Lender Write a Review

Lender Reviews

Great First Home Buying Experience!

Yes, I recommend this lender

They were extremely quick to respond after initial inquiry online. I received a phone call and email within an hour after submitting a request for information. They were very knowledgeable every step of the way and helped us meet our early deadline for closing! The website was easy to use to upload all our documents, and the closing company was impressed with the ease of communication and coordination. Great experience for first time home buying!

By: Melissa (Beaver, PA)

Great Experience

Yes, I recommend this lender

I have refinanced many times over the years and Consumer Direct Mortgage stands out above all of the mortgage companies that I have worked with. Everyone that I dealt with was friendly, efficient, and knowledgeable.

By: Dan (Harvard, MA)

Great Company to Use

Yes, I recommend this lender

I just completed two Cash out refinances with ConsumerDirect. I have to say, using ConsumerDirect was a great experience. I've done over a dozen Refinances and home purchases mortgages over the years, using Mortgage Brokers, Big Banks, Small Local Banks and Mortgage companies. ConsumerDirect was the easiest Refi I've done. Their rates beat all my prior connections and their fee's were the lowest. I don't see me using anyone else again. The process was easy, I scanned my documents, loaded them up to a secure website then we communicated via email and phone for the follow-ups. Their response time was usually within the hour, in fact I felt guilty if I didn't get back to them within a few hours. From start to finish it took 4 weeks (and that was doing 2 cash out refi's at the same time). I would highly recommend them to anyone looking for a loan. This online process is so much better than the way getting mortgages used to be. Use them, you won't be disappointed!

By: Scott (Portland, OR)
See All Reviews
eLEND
30 Year Fixed
Interest Rate
3.500%
APR
3.663%
Monthly Payment
$450
(877) 746-4145 Contact
eLEND
Email Lender

Offer Details

Home Value $200,000
Requested Loan Amount $100,000
Lock Period 30 Days
Down Payment $0
Principal and Interest Payments $450
Estimated Mortgage Insurance Payments $0
Total Monthly Mortgage Payment $450
Lender Fees $2,002
Lender Credit $0
Total Closing Fees* $2,002
*Other 3rd party fees may apply
eLEND
Email Lender

About the Lender

eLEND provides residential mortgage financing directly to potential home buyers and existing homeowners through a robust online platform built to simplify the lending process. Our mortgage technology solutions help thousands of families every year achieve their home financing goals. We offer Conventional, FHA, VA, USDA, Jumbo, and Renovation financing programs with exceptional rates and service. A division of American Financial Resources, Inc., eLEND is backed by over 18 years of industry success. Our expert Mortgage Loan Originators will help connect you with the ideal financing solution to achieve your specific goals. Contact us today for a free rate quote or e-Approval.
eLEND
Email Lender Write a Review

Lender Reviews

Wade

After giving them papers directly from the IRS , after having to show divorce papers from 14yrs. Ago, having to get an itemized list of whom was filled on my bankruptcy, let's see what else phone numbers of ex employer from two years ago not the same year, personal reference?????please tell me how showing papers off an old divorce is when relevant? What about a bankruptcy that is 8yrs. Old, is it going to end it's been since December 3, 2015

By: Keri (Gibsonton, FL)

very rude

Stephen Pullen contacted us and he was extremely rude. He kept interrupting me and talking over me. Completely uninterested in what our needs were. We tried back in October to use them and no call backs. Very poor customer service

By: karen (Hinesville, GA)

good

Yes, I recommend this lender

Good

By: Arlen (Mukilteo, WA)
See All Reviews

15 Year Fixed

Interest Rate
2.875%
APR
3.037%
Monthly Payment
$685
Consumer Direct Mortgage, a division of FirstBank
15 Year Fixed
Interest Rate
2.875%
APR
3.037%
Monthly Payment
$685
(855) 997-1714 Contact
Consumer Direct Mortgage, a division of FirstBank
Email Lender

Offer Details

Home Value $200,000
Requested Loan Amount $100,000
Lock Period 30 Days
Down Payment $0
Principal and Interest Payments $685
Estimated Mortgage Insurance Payments $0
Total Monthly Mortgage Payment $685
Lender Fees $1,121
Lender Credit $0
Total Closing Fees* $1,121
*Other 3rd party fees may apply
Consumer Direct Mortgage, a division of FirstBank
Email Lender

About the Lender

At Consumer Direct Mortgage, we know that each customer has specific needs, so we strive to meet those specific needs with a wide array of products, investment tools, mortgages and best of all quality service and individual attention.You are our priority and we know that superior service, delivering what was offered, coupled with the lowest overall cost is the way to keep you as a customer for life. In a lending environment where everyone is offering the same core products and programs, we know that we have to separate ourselves with an unwavering commitment to services and delivering the lowest overall total cost to close every day. Our sales and operations team is comprised of veteran Mortgage Professionals that are committed to this philosophy and understand what it takes to get the job done on time and at the agreed upon terms and conditions presented.
Consumer Direct Mortgage, a division of FirstBank
Email Lender Write a Review

Lender Reviews

Great First Home Buying Experience!

Yes, I recommend this lender

They were extremely quick to respond after initial inquiry online. I received a phone call and email within an hour after submitting a request for information. They were very knowledgeable every step of the way and helped us meet our early deadline for closing! The website was easy to use to upload all our documents, and the closing company was impressed with the ease of communication and coordination. Great experience for first time home buying!

By: Melissa (Beaver, PA)

Great Experience

Yes, I recommend this lender

I have refinanced many times over the years and Consumer Direct Mortgage stands out above all of the mortgage companies that I have worked with. Everyone that I dealt with was friendly, efficient, and knowledgeable.

By: Dan (Harvard, MA)

Great Company to Use

Yes, I recommend this lender

I just completed two Cash out refinances with ConsumerDirect. I have to say, using ConsumerDirect was a great experience. I've done over a dozen Refinances and home purchases mortgages over the years, using Mortgage Brokers, Big Banks, Small Local Banks and Mortgage companies. ConsumerDirect was the easiest Refi I've done. Their rates beat all my prior connections and their fee's were the lowest. I don't see me using anyone else again. The process was easy, I scanned my documents, loaded them up to a secure website then we communicated via email and phone for the follow-ups. Their response time was usually within the hour, in fact I felt guilty if I didn't get back to them within a few hours. From start to finish it took 4 weeks (and that was doing 2 cash out refi's at the same time). I would highly recommend them to anyone looking for a loan. This online process is so much better than the way getting mortgages used to be. Use them, you won't be disappointed!

By: Scott (Portland, OR)
See All Reviews
eLEND
15 Year Fixed
Interest Rate
2.875%
APR
3.181%
Monthly Payment
$685
(877) 746-4145 Contact
eLEND
Email Lender

Offer Details

Home Value $200,000
Requested Loan Amount $100,000
Lock Period 30 Days
Down Payment $0
Principal and Interest Payments $685
Estimated Mortgage Insurance Payments $0
Total Monthly Mortgage Payment $685
Lender Fees $2,104
Lender Credit $0
Total Closing Fees* $2,104
*Other 3rd party fees may apply
eLEND
Email Lender

About the Lender

eLEND provides residential mortgage financing directly to potential home buyers and existing homeowners through a robust online platform built to simplify the lending process. Our mortgage technology solutions help thousands of families every year achieve their home financing goals. We offer Conventional, FHA, VA, USDA, Jumbo, and Renovation financing programs with exceptional rates and service. A division of American Financial Resources, Inc., eLEND is backed by over 18 years of industry success. Our expert Mortgage Loan Originators will help connect you with the ideal financing solution to achieve your specific goals. Contact us today for a free rate quote or e-Approval.
eLEND
Email Lender Write a Review

Lender Reviews

Wade

After giving them papers directly from the IRS , after having to show divorce papers from 14yrs. Ago, having to get an itemized list of whom was filled on my bankruptcy, let's see what else phone numbers of ex employer from two years ago not the same year, personal reference?????please tell me how showing papers off an old divorce is when relevant? What about a bankruptcy that is 8yrs. Old, is it going to end it's been since December 3, 2015

By: Keri (Gibsonton, FL)

very rude

Stephen Pullen contacted us and he was extremely rude. He kept interrupting me and talking over me. Completely uninterested in what our needs were. We tried back in October to use them and no call backs. Very poor customer service

By: karen (Hinesville, GA)

good

Yes, I recommend this lender

Good

By: Arlen (Mukilteo, WA)
See All Reviews

5/1 ARM

Interest Rate
2.875%
APR
3.357%
Monthly Payment
$415
Consumer Direct Mortgage, a division of FirstBank
5/1 ARM
Interest Rate
2.875%
APR
3.357%
Monthly Payment
$415
(855) 997-1714 Contact
Consumer Direct Mortgage, a division of FirstBank
Email Lender

Offer Details

Home Value $200,000
Requested Loan Amount $100,000
Lock Period 30 Days
Down Payment $0
Principal and Interest Payments $415
Estimated Mortgage Insurance Payments $0
Total Monthly Mortgage Payment $415
Lender Fees $1,419
Lender Credit $0
Total Closing Fees* $1,419
*Other 3rd party fees may apply
Consumer Direct Mortgage, a division of FirstBank
Email Lender

About the Lender

At Consumer Direct Mortgage, we know that each customer has specific needs, so we strive to meet those specific needs with a wide array of products, investment tools, mortgages and best of all quality service and individual attention.You are our priority and we know that superior service, delivering what was offered, coupled with the lowest overall cost is the way to keep you as a customer for life. In a lending environment where everyone is offering the same core products and programs, we know that we have to separate ourselves with an unwavering commitment to services and delivering the lowest overall total cost to close every day. Our sales and operations team is comprised of veteran Mortgage Professionals that are committed to this philosophy and understand what it takes to get the job done on time and at the agreed upon terms and conditions presented.
Consumer Direct Mortgage, a division of FirstBank
Email Lender Write a Review

Lender Reviews

Great First Home Buying Experience!

Yes, I recommend this lender

They were extremely quick to respond after initial inquiry online. I received a phone call and email within an hour after submitting a request for information. They were very knowledgeable every step of the way and helped us meet our early deadline for closing! The website was easy to use to upload all our documents, and the closing company was impressed with the ease of communication and coordination. Great experience for first time home buying!

By: Melissa (Beaver, PA)

Great Experience

Yes, I recommend this lender

I have refinanced many times over the years and Consumer Direct Mortgage stands out above all of the mortgage companies that I have worked with. Everyone that I dealt with was friendly, efficient, and knowledgeable.

By: Dan (Harvard, MA)

Great Company to Use

Yes, I recommend this lender

I just completed two Cash out refinances with ConsumerDirect. I have to say, using ConsumerDirect was a great experience. I've done over a dozen Refinances and home purchases mortgages over the years, using Mortgage Brokers, Big Banks, Small Local Banks and Mortgage companies. ConsumerDirect was the easiest Refi I've done. Their rates beat all my prior connections and their fee's were the lowest. I don't see me using anyone else again. The process was easy, I scanned my documents, loaded them up to a secure website then we communicated via email and phone for the follow-ups. Their response time was usually within the hour, in fact I felt guilty if I didn't get back to them within a few hours. From start to finish it took 4 weeks (and that was doing 2 cash out refi's at the same time). I would highly recommend them to anyone looking for a loan. This online process is so much better than the way getting mortgages used to be. Use them, you won't be disappointed!

By: Scott (Portland, OR)
See All Reviews
Sebonic Financial
5/1 ARM
Interest Rate
3.000%
APR
3.507%
Monthly Payment
$422
(844) 906-0508 Contact
Sebonic Financial
Email Lender

Offer Details

Home Value $200,000
Requested Loan Amount $100,000
Lock Period 30 Days
Down Payment $0
Principal and Interest Payments $422
Estimated Mortgage Insurance Payments $0
Total Monthly Mortgage Payment $422
Lender Fees $2,802
Lender Credit $0
Total Closing Fees* $2,802
*Other 3rd party fees may apply
Sebonic Financial
Email Lender

About the Lender

Sebonic Financial is a division of Cardinal Financial Company, a full service mortgage banking firm in operation since 1987.  The company is an approved seller/servicer for Fannie Mae, Freddie Mac and Ginnie Mae. Cardinal is also an approved lending institution for the Department of Housing and Urban Development/Federal Housing Administration and the Department of Veteran Affairs/Veterans Administration with FHAs Direct Endorsement and VA Automatic Lender Authority.  Cardinal is an authorized lender for the USDA/Rural Housing Program, the Pennsylvania Housing Finance Agency and the New Jersey Mortgage Housing Finance Agency.

 

Cardinal is licensed by the Departments of Banking in many states, mainly in the eastern and southeastern United States.  Its retail and wholesale divisions originate first mortgage loans for qualified borrowers.

Sebonic Financial
Email Lender Write a Review

Lender Reviews

Sebonic was quick, inexpensive and easy

Yes, I recommend this lender

After receiving what I perceived as poor service at Quicken I walked away from them the week of the scheduled closing and went with Sebonic. As far as I am concerned it was a great decision as I closed quickly with a slightly better rate and lower closing costs. James Dawkins was assigned to push my loan through and he was very responsive and helpful. For the closing they sent a notary to my home and with a little help from James everything was done in about 45 minutes. This was probably about my 20th loan / refi and the first that was done almost entirely via the internet. The internet added a few twists to the process but overall it was painless.

By: Andrew (Pinehurst, NC)

Avoid at all costs

Started our refi 3 months ago, and for the second time, no one showed up for our closing, with no call, email, anything!!! WORST experience ever! Would gladly have paid thousands more if I had known! Started with after waiting 2 weeks for the appraisal, the first appraiser having a "family emergency" so had to wait another 2 weeks for another appraiser. We felt bad for the first guy, so we understood. This is when we first started to notice emails and phone calls not being answered. The only time we could reach anyone was to call their customer service line, and they would corner our rep. And then we would get circle answers, and promises of answers that never came. Then a glitch in paperwork came up due to a discharged bankruptcy years ago. Offered to handle it with guidance and were told they would take care of it. That was that. We were then told we would close Friday or Saturday, after only 6 weeks... Great! They will call us. No call Thursday. Friday we call 3-4 times, email, no answer. Still waiting by the phone Saturday, called, emailed, still nothing. We called and emailed Monday... No answer. Finally Tuesday for a "manager" who advised our rep was our of town and would get back to us the next day. Finally heard from him 2 days after that, and many emails and calls, and the bk paperwork came back to bite us. We had to handle this now. So we are now on our FOURTH extension, discussing something that was originally discovers the first week and we were told was not a problem. Then our rep gets in an "accident" so we are now dealing with the manager. We Also find out we will have to file the FIFTH extension, which they will it pay for but costs us almost another $900! WE took care of that, to avoid having to wait for them. We told them that day it would be 2 weeks. We close that, and they have done NOTHING to get it moving again. They needed the paperwork. So we send that to them on Friday, during business hours, for the second time because the attorney sent it to them as well. Monday was a holiday, Tuesday we call and email. I get an email back again asking for that paperwork. I send it a third time, and am told great, should close Wednesday since everything else is "done." Wednesday keep emailing and calling, all day. Re sending paperwork they have, but at least it's moving. Then... Nothing! Call customer care at 5:00 and reach the officers manager again to be told all looks good, we will call you in the morning to close tomorrow, we requested 12:00, she assured us that should be doable. Once we heard fro The closer, they advise they can't do that, so we agree on 8 pm. Bat 6:30 I happen to check my email to find an email for the manager asking for current credit card statements, which ones were not listed though. Ok.... I'm on the road, so I ask her if which ones, and if it can wait until I get home. I specifically ask if this will effect our closing since this is so last minute. She sends me the list, no other replace sw. I send her 4 more emails in the next hour asking if we are closing... I call the main line, customer care, and every other number we can find all with no answers. I have the email confirming the closing for tonight at 8 pm, and here it is 11:30 and no show still. Yes, I know they won't be here, and I am still hoping for tomorrow, but I'm so me I know I can't sleep. Please, save yourself the stress, sleepless night and frustration and take your business elsewhere. We started this June 16 and STILL have not closed, and can not get an explanation why.

By: Donna (Littleton, CO)

Owner

Yes, I recommend this lender

Overall experience was one of complete pleasure. Any delay in the process was caused by me and at that, it was only a month.

By: Haydee (Marietta, GA)
See All Reviews
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.

Should I refinance
my mortgage?

If you can answer "Yes" to any of these questions, then a refinance may be right for you:

  • Are interest rates rising?
  • Has your credit rating improved?
  • Has your income increased?
  • Has your home equity increased?
  • Do you need to consolidate debt?
  • Do you need money for a major expense?

See how much you could be saving with Mortgage Checkup. It’s absolutely free!

Start My Mortgage Checkup

It’s so easy. All it takes is answering a few simple questions and you’re on your way to the perfect refinance loan. The tools below make it a snap to shop, compare and negotiate so you get the best deal.

  1. Mortgage Checkup Get a personalized overview of how refinancing can help you save.
  2. Loan Explorer Take a look at customized rates, plans and lender reviews.
  3. Refinance Breakeven Calculator Get a detailed analysis of how an individual refinance loan will help you save.
  4. Mortgage Negotiator Enter your GFE (Good Faith Estimate) results to compare lender offers.

It's really that simple to get the answers you need about refinancing. And remember – there's no obligation – and no cost - to find out.

Frequently Asked Questions

What is cash-out mortgage refinancing?

Borrowers who refi their mortgage often want to convert some of their equity in their home into cash. If you take out cash when you refinance, your new loan will be bigger than the loan you want to replace. The difference between the current pay-off amount and the new balance is paid to you in cash.

Can cash-out refinancing save you money?

Before refinancing for cash-out, make sure it's a good idea. Mortgage fees for cash-out refi's are higher than those of ordinary rate-and-term. If you can’t significantly lower your rate, then that may not be the best way to get your cash.

What are the 5 basic steps to refinancing?

1. Determine if you should refinance
2. Find a lender
3. Choose a program
4. Apply here
5. Lock in your rate

Should I refinance to an FHA mortgage?

You don’t need to have an FHA mortgage to refinance with FHA. And the fact that you can refi up to 97.5 percent of your home’s current value is a compelling reason to consider this option. For those with credit scores under 740 or loan-to-values above 80 percent, an FHA refi may be cheaper than Fannie Mae and Freddie Mac’s risk-based surcharges. But FHA also has its costs.

How do I “qualify” for a refinance loan?

Three steps. Home Equity, and Credit Score.
Step 1: Home Equity: Property value should exceed the refinance amount
Step 2: Income: Total of refi payment plus other debts should be < 43% of gross income
Step 3: Credit: Credit score should exceed lender minimums (usually 620-660). Homeowners who don't meet these three guidelines should look for streamline programs, which are more flexible.

Should you use cash-out refinancing?

If you have high interest debt that you want to pay off and you are able to rein in your spending, the answer may be yes. You may be able to use cash-out refinancing to get a much lower interest mortgage with a larger principal, where the difference is enough to pay off that credit card debt. Used wisely, that can be a smart move.

How do you compare a cash-out refi to a home equity loan?

It depends on several factors – how the loan will be used, if the homeowner can improve the terms of their existing mortgage and calculating blended rates and refinance rates. Ultimately, home equity lines can often be set up for free, and home equity loans cost much less to set up than rate-and-term or cash-out refinances. Unless the homeowner can get refi offers that are significantly better than the existing home loan, taking a second mortgage (either home equity loan or line of credit) is a smarter choice.

How does cash-out refinancing work?

Cash-out refinancing is based on your home equity, which is the part of the home that you actually own. For example, if you have a home worth $250,000, and you owe $200,000 on the mortgage, you have $50,000 worth of equity in the home. If you refi the loan, that $50,000 is available for you to use (depending on your lender’s rules).

When does it pay to refinance a mortgage?

Any time you can get a no-cost refi with a lower interest rate, go for it – you have no break-even period, so the savings go straight to your bottom line. You can invest it, pay down your debts or accelerate your mortgage payoff.

How do I get the best rate on my jumbo mortgage refi?

You’ll want to shop around. Find a good broker who not only knows where the programs are, but who also can tell you which lenders offer the best rates and are most likely to approve your application. Local real estate agents who list a lot of high-end homes who also know finances are also a good resource. Keep in mind, though, that a real estate agent’s main priority is that the mortgage gets approved and closed quickly. You can also look into a hybrid ARM improving your credit score in order to lower your loan’s interest rate.

Is it time to refinance your ARM?

As a rule of thumb, it’s worth considering a refinance if your new interest rate will be around 1.5 to 2 percent lower than your current rate. (Otherwise, fees may eat up any potential savings.) Compare your current rate with the posted rates offered by other lenders, but be sure to ask about the index and margin -- if they are different from those of your existing ARM, you may be comparing apples and oranges.

What are the basics of cash-out refinancing?

It is the process of taking out a new mortgage with a larger principal than your current mortgage. The difference in principal is paid to you as cash, which you can use for almost any purpose, including debt consolidation.