A cash-out refinance, as the name suggests, involves refinancing your mortgage for a higher amount than you owe and taking out the difference in cash. This can be useful if you need to pay for home improvements, education expenses, or other large purchases. The cash can also be used to pay off other higher-interest debt like credit cards or auto loans. A cash-out refinance typically has a higher interest rate than a rate and term refinance. Cash-out limits vary by state and can be as high as 90% of the home's value but limited to 80% in states like Texas.
A Rate and term refinance keeps the mortgage amount the same but with a lower interest rate and/or a shorter loan term. This can lower your monthly payments and potentially total interest costs over the life of the loan. However, restarting the loan can extend the term of your loan and may cost more in interest, even if your monthly payments are lower. At altgage, we offer customer loan lengths that enable a "rate only" refinance while keeping the mortgage length the same (rounded to the nearest year)
An FHA streamline is a type of rate & term refinance specific to FHA loans. They have several added benefits of
No credit check: Unlike a regular refinance, which requires a credit check or verification of income or employment.
No appraisal: An FHA streamline does not require an appraisal of a home's value, which saves time and money.
Lower costs: The FHA streamline has lower costs because upfront mortgage insurance isn't charged again