Cash-out refinancing allows you to borrow more than you owe on your current mortgage, using the extra funds for personal needs.
Frequently Asked Questions
Mortgages
What is a mortgage?
A mortgage is a loan you take out to buy a home. It is secured by the property itself, meaning the lender can take ownership of the property if you fail to repay the loan.
What are the types of mortgages available?
Common mortgage types include:
- Fixed-rate mortgages
- Adjustable-rate mortgages (ARMs)
- FHA loans
- VA loans
- Jumbo loans
How much down payment is required for a mortgage?
The required down payment varies by lender and loan type. It can range from as low as 3% for FHA loans to 20% for conventional loans without private mortgage insurance (PMI).
What is private mortgage insurance (PMI)?
PMI is a type of insurance that protects the lender if you stop making payments on your loan. It is typically required if your down payment is less than 20%.
Refinancing
What is refinancing?
Refinancing replaces your current mortgage with a new one, often with better terms such as a lower interest rate or reduced monthly payments.
When should I consider refinancing my mortgage?
Consider refinancing when:
- Interest rates are significantly lower than your current rate.
- You want to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
- You want to access your home equity for expenses like renovations or debt consolidation.
What are the costs of refinancing?
Refinancing costs typically include:
- Application fees
- Appraisal fees
- Loan origination fees
- Closing costs (usually 2-5% of the loan amount)
How does cash-out refinancing work?
Loans
What types of loans can I use to buy a home?
Besides traditional mortgages, you can explore:
- Personal loans (for smaller home purchases)
- Home equity loans
- Bridge loans
What is a home equity loan?
A home equity loan lets you borrow against the equity in your home, which is the difference between your home’s market value and the amount you still owe on your mortgage.
What is the difference between secured and unsecured loans?
- Secured loans require collateral (e.g., your home for a mortgage).
- Unsecured loans don’t require collateral but often have higher interest rates.
How does a loan term affect monthly payments?
A longer loan term typically results in lower monthly payments but higher overall interest costs. Conversely, shorter loan terms have higher monthly payments but lower total interest.
Blog
How to Improve Your Credit Score for a Mortgage
Discover practical tips and strategies to boost your credit score and qualify for better mortgage terms, including timely payments, reducing debt, and correcting credit report errors.
Read More
Top Mistakes First-Time Homebuyers Should Avoid
Learn about common pitfalls for first-time homebuyers, from overestimating budgets to skipping home inspections, and how to navigate the home-buying process like a pro.
Read More
Refinancing 101: When and Why It Makes Sense
Understand the basics of mortgage refinancing, the scenarios where it can save you money, and how to calculate if refinancing is the right move for your financial future.
Read More
Tools & Calculators
TRUE FINANCIAL LENDING LIMITED PARTNERSHIP (NMLS ID: 2632571) is a Michigan-registered Limited Partnership formed on 07/30/2024. Our principal office is located at 31555 W 14 Mile Rd., Farmington Hills, MI 48334. We are licensed as a Mortgage Company in Colorado and a Mortgage Broker in Florida and are authorized to conduct business in these states. For inquiries, please contact us at 313-402-7738 or via email at igli.hayder@gmail.com. This website is intended for informational purposes only and does not constitute an offer to lend or provide financial advice. TRUE FINANCIAL LENDING LIMITED PARTNERSHIP does not guarantee the accuracy or completeness of the information provided herein. Regulatory actions, if any, will be disclosed as required by law.
