Benefits of a Conventional Loan Refinance

Conventional refinance rates are based on a refinance shopper's situation. Depending on risk factors, like credit score and income, a low-risk borrower could receive a better interest rate than another applicant. Generally, conventional loans are best suited for those with a credit score of 680 and above. You do not need a conventional mortgage to refinance, however.

With as little as 5% equity you can refinance any type of mortgage with a conventional loan:

+

FHA loans

+

USDA

+

Alt-A loans

+

Subprime loans

+

Option Arms

+

Adjustable rate mortgages

Although HARP and FHA loans have reigned the refinance market, the standard conventional refinance is a viable go-to-option now that home equity is returning across the country.

What is a HARP

If you have 20% equity in your home you will receive a traditional conventional refinance. With less equity your loan will subjected to meet HARP (home affordable refinance program) requirements. A HARP loan is a conventional refinance that allows you to refinance with little or no equity in your home.

With a conventional refinance borrowers can:.

+

Refinance a primary or secondary residence, or investment property

+

Turn home equity into cash at closing

+

Eliminate private mortgage insurance (PMI)

+

Cancel FHA mortgage insurance

+

Shorten the terms of the loan