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Mortgage Refinance California
Wouldn’t you love to lower your monthly payment on your mortgage? It may not be too later? How about getting cash out of to spend on whatever you want?
True or False: You have to have a lower interest rate to have a lower payment? When you originally purchased or refinanced your loan amount was higher. Now, if you refinance with a lower balance than originally, you may end up with a lower payment.
You have worked hard for your property, maybe it’s time for your property to work for you.
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7 Reasons to Refinancing
Get a Lower Monthly payment: It is possible that a higher interest rate can result in a lower payment if the amortization term increases.
Get cash out to pay off high interested debt: This can result in a lower monthly outlay of cash.
Get cash out to renovate your property: Improving your property can create real value either just to enjoy or for resale.
Get cash out for retirement: You have worked hard for your home, maybe it’s time for your home to work for you.
Eliminate your Mortgage Insurance: If you bought a home with mortgage insurance it might make sense to refinance in to a new loan.
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Maximum LTV for cash out refinance
Loan-to-value ratios (LTV) for cash out refinancing
A cash out refinance allows you to get cash from your home’s equity by replacing your old mortgage for a new mortgage for a higher amount. Many homeowners use cash out refinances to pay for home improvements and college educations or to consolidate debts like credit cards or personal loans.
What is a maximum loan-to-value ratio (LTV)?
The maximum loan-to-value ratio (LTV) of a cash out refinance is important because it affects whether you qualify for refinancing as well as how much money you may be able to borrow from your home’s equity. LTV is a percentage calculated as follows:
Your current mortgage loan ÷ appraised value of the home = your loan-to-value ratio
For example, if your current mortgage balance is $150,000 and your home is worth $300,000, then your loan-to-value ratio is 50%. (That is $150,000 ÷ $300,000 = 0.50 or 50%.)
Different loan types have different maximum LTV values for their cash out refinances. We offer cash out refinancing with conventional, VA, and FHA loans.
What is the maximum LTV on a conventional cash out refinance?
The maximum loan-to-value ratio for a conventional cash out refinance is often 80%. This means your LTV can be no higher than 80% if you want to qualify for cash out refinancing with a conventional loan. Take a look at this sample calculation:
| Home Value | $275,000 |
| Current mortgage balance | $125,000 |
| Sample maximum LTV | 0.80 or “80%” |
| Maximum new mortgage balance | $220,000 ($275,000 x 0.8) |
| Maximum cash available | $95,000 ($220,000 – $125,00) |
The homeowner in this example may qualify for a cash out refinance for up to $95,000 in cash. Keep in mind you’ll need to meet other credit, income, and financial requirements to get your loan approved.
What is the maximum LTV on an FHA cash out refinance?
At Freedom Mortgage, the maximum loan-to-value ratio for an fha cash out refinance is also often 80%. Like with conventional loans, you’ll also need to meet credit, income, and financial requirements to get your FHA cash out refinance application approved.
What is the maximum LTV on a VA cash out refinance?
At Freedom Mortgage, veterans, active-duty military personnel, and surviving spouses with VA loans may qualify for VA cash out refinancing with a 90% max loan-to-value ratio. Let’s look at the same sample homeowner as above with a 90% maximum LTV:
| Home Value | $275,000 |
| Current mortgage balance | $125,000 |
| Sample maximum LTV | 0.90 or “90%” |
| Maximum new mortgage balance | $247,500 ($275,000 x 0.9) |
| Maximum cash available | $122,500 ($247,500 – $125,000) |
The VA homeowner in this example might be eligible to receive up to $122,500 in cash after refinancing – more than they could get with a conventional or FHA cash out. Most VA homeowners will still need to pay a VA funding fee in addition to their closing costs when refinancing. And they will need to meet credit, income, and financial requirements to get their loan approved.
Speak to one of our Loan Advisors about cash out refinancing
Borrowing money against the value of your home can come in handy if you have major home renovations to make, are looking to consolidate debts, or are pursuing additional education to further your career.
What is a maximum loan-to-value ratio (LTV)?
The maximum loan-to-value ratio (LTV) of a cash out refinance is important because it affects whether you qualify for refinancing as well as how much money you may be able to borrow from your home’s equity. LTV is a percentage calculated as follows:
Your current mortgage loan ÷ appraised value of the home = your loan-to-value ratio
For example, if your current mortgage balance is $150,000 and your home is worth $300,000, then your loan-to-value ratio is 50%. (That is $150,000 ÷ $300,000 = 0.50 or 50%.)
Different loan types have different maximum LTV values for their cash out refinances. We offer cash out refinancing with conventional, VA, and FHA loans.
What is the maximum LTV on a conventional cash out refinance?
At Freedom Mortgage, the maximum loan-to-value ratio for a conventional cash out refinance is often 80%. This means your LTV can be no higher than 80% if you want to qualify for cash out refinancing with a conventional loan. Take a look at this sample calculation:
| Home Value | $275,000 |
| Current mortgage balance | $125,000 |
| Sample maximum LTV | 0.80 or “80%” |
| Maximum new mortgage balance | $220,000 ($275,000 x 0.8) |
| Maximum cash available | $95,000 ($220,000 – $125,00) |
The homeowner in this example may qualify for a cash out refinance for up to $95,000 in cash. Keep in mind you’ll need to meet other credit, income, and financial requirements to get your loan approved.
Speak to one of our Loan Advisors about cash out refinancing
Borrowing money against the value of your home can come in handy if you have major home renovations to make, are looking to consolidate debts, or are pursuing additional education to further your career.
Get Started online or talk to one of our Loan Advisors at (800)983-2430 about applying for a new mortgage today!
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built=”1″ theme_builder_area=”post_content” _builder_version=”4.14.7″ _module_preset=”default” custom_margin=”-50px|||||” custom_padding=”23px|||||”][et_pb_row _builder_version=”4.14.7″ _module_preset=”default” column_structure=”2_5,3_5″ theme_builder_area=”post_content”][et_pb_column _builder_version=”4.14.7″ _module_preset=”default” type=”2_5″ theme_builder_area=”post_content”][et_pb_image src=”https://nw-mortgage.com/wp-content/uploads/2022/03/California-Poppy.jpg” _builder_version=”4.14.7″ _module_preset=”default” theme_builder_area=”post_content” alt=”California Mortgage Refinance ” title_text=”California Poppy” hover_enabled=”0″ sticky_enabled=”0″][/et_pb_image][/et_pb_column][et_pb_column _builder_version=”4.14.7″ _module_preset=”default” type=”3_5″ theme_builder_area=”post_content”][et_pb_text _builder_version=”4.14.7″ _module_preset=”default” theme_builder_area=”post_content” hover_enabled=”0″ sticky_enabled=”0″]
California conventional mortgages:
Rates and requirements will vary depending on the area you want to live in and your financial situation.
CalHFA:
The California Housing Finance Agency (CalHFA) offers state residents access to mortgages, as well as smaller loans designed to help with a down payment or closing costs. To get started, borrowers can contact a CalHFA-approved lender or preferred loan officer.
California FHA loans:
Home loans backed by the Federal Housing Administration (FHA) are offered throughout the U.S. While the FHA doesn’t offer loans directly, you can find one through an FHA-approved lender in California. They are offered to first-time homebuyers, defined as those that have not purchased a home in the past two years, as well as repeat buyers. FHA loans are generally designed for low- to moderate-income borrowers with lower credit scores.
California VA loans:
Backed by the Department of Veterans Affairs, VA loans are offered to eligible veterans and active duty service members. The VA doesn’t offer loans directly, you can get help through VA-approved brokers and lender in California. They require no down payment and typically have lower interest rates than conventional mortgages.
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