Mortgage Refinancing

A home refinance is when you replace your current mortgage loan with a new mortgage loan. Some homeowners refinance in order to change the terms of their loan (for instance, going from a 30-year to a 15-year mortgage term) and others refinance to get a lower interest rate.

A cash-out refinance is a specific form of mortgage refinance that allows the borrower to “cash out” a portion of their home’s equity. A new mortgage loan then replaces the existing mortgage for a larger sum than was owed previously, and the borrower receives cash for the additional mortgaged amount. Learn more about Cash-Out Refinances vs. Home Equity Loans.

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The interest rate you pay on your mortgage is based on a variety of factors. Your lender will review your individual credit circumstances, including down payment, loan term and type, current market rates, and provide you financing options to best fit your needs.

A credit score is one of the pieces of information that we’ll use to evaluate your application. Financial institutions have been using credit scores to evaluate credit card and auto applications for many years, but only recently have mortgage lenders begun to use credit scoring to assist with their loan decisions.

Credit scores are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.

Some of the things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.

Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won’t be paid as agreed.

Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application. However, there are many other factors when making a loan decision and we never evaluate an application without looking at the total financial picture of a member.

Processing your application can vary by lender and market conditions. The typical timeframe from application to closing ranges from 30 to 60 days.