Loan Programs

Refinance

Refinancing replaces your existing mortgage with a new one. Homeowners refinance for different reasons: to lower their rate, change their loan term, switch loan programs, or access home equity. Understanding your goals helps determine which option is right for you.

Rate-and-Term Refinance

A rate-and-term refinance changes your interest rate, loan term, or both without adding to your loan balance. Common reasons include lowering your monthly payment by securing a lower rate, shortening your loan term to pay off the mortgage faster, or switching from an adjustable-rate to a fixed-rate mortgage.

Eligibility depends on your credit score, equity in the property, and current income verification. Closing costs typically apply and should be weighed against the monthly savings.

Cash-Out Refinance

A cash-out refinance replaces your existing mortgage with a larger loan, and you receive the difference in cash at closing. The cash can be used for renovations, debt consolidation, or other financial goals.

How It Works

Your new loan pays off the existing mortgage. The remaining funds (minus closing costs) are paid to you as cash. The amount you can borrow is limited by your home equity and lender guidelines.

Equity Requirements

Most conventional cash-out refinance programs limit the new loan to 80 percent of the property's appraised value, meaning you must retain at least 20 percent equity. VA cash-out refinance may allow loans up to 100 percent of value for eligible veterans.

Keys Considerations

Florida Keys property appraisals for refinance face unique considerations, including comparable property availability, flood zone designations, and property condition. Cash-out refinance is commonly used for property improvements, renovations, or acquiring additional investment properties.

FAQ
What is the difference between rate-and-term refinance and cash-out refinance?
A rate-and-term refinance changes your interest rate, loan term, or both without taking additional cash. A cash-out refinance replaces your existing mortgage with a larger loan, and you receive the difference (minus closing costs) in cash. Each serves different financial goals.
How much equity do I need to refinance?
Requirements vary by loan program. Conventional rate-and-term refinance typically requires at least 5 to 10 percent equity. Cash-out refinance is generally limited to 80 percent of the home's value (meaning you keep 20 percent equity). VA loans may allow up to 100 percent for eligible veterans.
Does refinancing in the Florida Keys have special considerations?
Yes. Keys property appraisals for refinance face the same challenges as purchase appraisals. Flood and wind insurance requirements affect the total housing payment. Condo refinance requires the project to meet warrantability requirements.
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