Refinancing is simplified with the California Employee Loan Program Experience.
Here’s some of the most common reasons homeowners refinance and what it can allow you to accomplish.
Even a small drop in your interest rate can make a meaningful difference. Refinancing to a lower rate can reduce your monthly payment, save you thousands over the life of the loan, or help you reach your financial goals faster.
Turn the equity you’ve built into cash you can actually use. A cash-out refinance lets you tap into your home’s value for things like debt consolidation, renovations, or big life expenses, often at a lower rate than other borrowing options.
If you bought with an FHA loan, you may be paying mortgage insurance longer than you need to. Refinancing into a conventional loan can eliminate PMI once you have enough equity, lowering your monthly payment and putting more money back in your pocket.
A HELOC gives you flexible access to your home’s equity without refinancing your entire mortgage. Use what you need, when you need it, could be for renovations, investments, or unexpected expenses and only pay interest on the amount you use.
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The total cost to refinance depends on a number of factors like your lender and your home’s value. Expect to pay about 3% – 6% of the total value of your loan. For example, if your loan is for $300,000, then your refinance closing costs will typically range between $9,000 and $18,000.
You may not have to pay those costs out of pocket. In some cases, you can get a no-closing-cost refinance so you don’t have to bring any money to the table. Be aware that closing cost is then paid over the life of the loan in the form of a higher rate.
If you’re trying to decide whether you should you refinance, be sure to consider market trends, current interest rates, your credit score, and the amount of equity you’ve built. You can use our mortgage refinance calculator to figure out your break-even point to determine how long it will take to recoup your refinance expenses and begin saving money.
You also need to know how refinancing differs from other mortgage options, like loan modification and second mortgages.
No, a second mortgage is not the same as refinance. When you refinance, a new mortgage replaces your existing loan. With a second mortgage, you take out another loan using your home as collateral, leaving you with a second loan payment each month. While second mortgages typically require lower closing costs, they usually have higher interest rates than a refinance. Second mortgages also come with more risk. Since you’re using the home as collateral, you could lose the home if you can’t keep up with your payments.
When you complete a loan application, we use a soft credit pull to review your credit without impacting your score. Once you’re approved and ready to move forward with a refinance, we’ll complete a hard credit pull with your authorization.
For any unanswered questions, reach out to our support team. We’ll respond as soon as possible to assist you.
Refinancing can be a smart way to make your mortgage work better for you. Whether that means lowering your payment, removing mortgage insurance, or accessing the equity you’ve built. It’s about aligning your home financing with where your life is now.
