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I want to refinance my mortgage. Where do I start?

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Whether you’re looking to increase your monthly savings, make improvements on your home, or have a lower monthly payment on your mortgage, refinancing could be the perfect solution. If you’re looking to maximize your cash flow and considering a home refinance, Quontic is here to help guide you through the process. With the real estate market hotter than it’s ever been and mortgage interest rates at the lowest we’ve seen in years, there’s never been a better time to begin. Keep reading to learn more about how refinancing works, why it could be beneficial for you, and how to get started.

What’s a mortgage refinance?
A mortgage refinance happens when homeowners seek out a new home loan in order to replace their current loan. The reasons why vary from homeowner to homeowner, but traditionally the end goal is to save money on your monthly mortgage payment. How does that happen? As you continue to make your mortgage payments and pay down principal, you gain more equity in your home. . Equity is the difference between the value of your home and the balance remaining on the current mortgage. If the value of your home increases and/or the mortgage balance decreases, the more equity in your home you gain. You can then use that equity to refinance your current mortgage to a lower rate/payment, consolidate credit cards or other loans into one easy monthly payment, or take ‘cash-out’ to use on home improvements or other investments.

What are my refinance options?
When it comes to home refinancing, there are a couple options to choose from. The most common choices are rate-and-term refinance and cash-out refinance. The objective of a rate-and-term refinance is to improve the terms of the current mortgage, whether it be lowering the rate, reducing the number of mortgage payments left on the loan, cancel out private mortgage insurance (PMI), or changing to a more stable product, such as going from an adjustable rate mortgage to a fixed rate mortgage. With a cash-out refinance, borrowers can use their home’s equity as cash in exchange for a larger mortgage loan. At closing, the borrower will receive net cash proceeds from the loan. The homeowner can then use the cash for debt repayment, home improvements, or savings. Ideally, a cash-out refinance can also have the same benefits of the rate-and-term refinance as mentioned above. 

How does the refinancing process work?
The refinancing process starts with working with a lender who is skilled and familiar with the refi market. Since 2020, refinance rates have been some of the lowest we’ve seen in a long time and now’s the perfect time to take advantage. The first step is pre-approval. After getting pre-approved for a new loan by a mortgage lender, you both work together to decide your financial goals and what new mortgage would work best for your situation. If your credit report shows strong history of repaying debts on time, with a FICO score to match, your loan is sent to underwriting and then closing. After signing your closing disclosure, the process is complete.

What are the benefits of a mortgage refinance?
There are many benefits to mortgage refinancing. Borrowers are able to take advantage of their home equity, get a different type of loan, secure a lower interest rate, or even lower their monthly payments. Additionally, it is a great way to help consolidate any outstanding debt, upgrade your kitchen or bathroom, or shorten your 30-year mortgage substantially. Whether you’re looking to eliminate PMI, pay less money each month on your mortgage payment or secure a fixed-rate mortgage, there are endless benefits to getting a refi. In general, homeowners use refinancing as a way to better their financial situation.

What are the alternatives to refinancing?
Refinancing isn’t always the best route for everyone. For example, if you have bad credit or a spotty credit history; consider working on raising your credit score before starting the refinancing process. The amount you can refinance is dependent on the value of your home. With that in mind, if your home hasn’t increased in value, the opportunity to benefit from a refinance is slim. Lenders use appraisals to determine the value of your home so the lower the appraisal, the less equity you have at your disposal. Also, if you plan on transitioning from homeowner to homebuyer and plan on moving soon, refinancing may not be the best option for you. All in all, take time to seriously consider your financial goals and timelines as the process will take some time.

What can I do with a cash-out refinance?
With a cash-out refinance, the possibilities are endless. Borrowers can use the money to pay off any debt, save for financial goals, or use the funds for home improvements. Whether you’re looking to pay down a credit card or save for a down payment for a second home and don’t have the money upfront, a cash-out refinance can give you the capital to make it happen. Cash-out refinances work for all types of borrowers. At Quontic, we take a more inclusive approach to lending for those who need alternative documentation to qualify. For example, self employed borrowers and retirees find their home loans through Quontic with our unique Community Development mortgage programs.

Does Quontic offer home refinancing?
As a lender licensed in all 50 states, Quontic offers everything from mortgage refinancing, to FHA loans, VA loans, Reverse mortgages and more. What sets us apart from other refinancing lenders are our unique programs, Community Development Loans. We accept 100% gift funds for closing costs and reserves and also offer loan amounts up to $3,000,000. We also don’t calculate Debt-to-income ratio, nor do we require stacks of bank statements or W2s to qualify.

How can I get my refinance loan started?
Ready to get started on refinancing your home? Look no further than the Quontic team. Our experienced loan officers will be happy to help!  As a Community Development Financial Institution, we cater to the underbanked and historically excluded. There’s no better time than now to take advantage of the booming refi market. Get conditionally pre-qualified today by clicking here. Interested in learning more? Read up on our Community Development loans, get tips on credit scores, and all things mortgage on the Quontic website. Quontic is the lender you’ve been looking for and there’s no better time to get started on your home financing plans.

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