Frequently Asked Questions

A borrower should consider refinancing their mortgage when interest rates drop, allowing them to secure a lower rate and reduce monthly payments. It's also beneficial if they want to shorten the loan term, switch from an adjustable-rate to a fixed-rate mortgage, reduce or eliminate private mortgage insurance, or tap into home equity for major expenses or debt consolidation.

Your loan officer will be able to help you with various options and outcomes to determine if now is the best time to refinance.

Refinance mortgage loans consider many of the same factors as does a purchase loan, so the borrower's credit profile, income, and assets will be analyzed in most cases. It's best to talk to your loan officer to determine what credit scores will be required for which type of loan, as that can vary widely among lenders and loan types.

It's a good idea to speak with your loan officer about your credit profile first, because different loan programs have different requirements. Once it's determined that improvement is needed in order to qualify, then you and your loan officer will work together to make a plan so that you can achieve your home financing goals.

While some lenders advertise "free refinancing," the reality is that refinancing always involves costs. Instead of paying upfront fees, these costs are often built into the new loan through a higher interest rate. This means you're still covering the refinancing expenses over time, even though there are no immediate out-of-pocket charges. Always review the terms to understand the true cost.

Down payments can be as little as 3% for a first time home buyer with a conventional loan, 3.5% with an FHA loan, and 0% down for VA and USDA loans. It's a common misconception that a buyer is required to put 20% down.

Down payments can come from a variety of sources, too. The three most common are your own funds, a gift from a qualified relative, or a down payment assistance program from a community lending partner.

Down payment assistance programs help homebuyers cover the upfront costs of purchasing a home, often through grants, low-interest loans, or forgivable loans. These programs are typically aimed at first-time buyers or those with low to moderate incomes, making homeownership more accessible by reducing the initial financial burden.

The answer to that lies in several things: your credit scores, income, the location of the home you're buying, and if you're a first time home buyer, among other things. Assistance can cover down payment and sometimes closing costs, so it's reviewed just like a home loan would be. Your loan officer will provide you with all the options that work for you.