Conventional Refinance Loan

Conventional Refinance Loan Programs

Conventional Refinance Loan:

When mortgage rates drop, every homeowner should think about refinancing their current home loan with a new mortgage loan at a lower mortgage rate to save money on interest.  A refinancing can save a homeowner tens of thousands of dollars over the life of their mortgage loan.  Conventional loans have an extra benefit when it comes to mortgage insurance. Private Mortgage Insurance is mandatory on all conventional loans with less than 20% equity, but the private mortgage insurance on conventional loans are much less costly than FHA mortgage insurance premium.

Lender Paid Mortgage Insurance

There are  various conventional refinance mortgage loan program that suits each particular refinance mortgage loan borrower. If you have less than 20% equity in your home, you can still refinance your current mortgage loan with no private mortgage insurance through a conventional loan program called lender paid mortgage insurance ( LPMI ) conventional refinance mortgage loan program .  The lender paid mortgage insurance conventional loan program does not require conventional private mortgage insurance paid by the mortgage loan borrower.  The conventional private insurance premium is built into the conventional mortgage rate.  Lender paid mortgage insurance conventional loan program is available for homeowners who have less than 20% equity in their homes.  In lieu of a slightly higher mortgage rate, the homeowner avoids the extra cost of monthly private mortgage insurance costs.

Refinance FHA Loan To Conventional To Avoid FHA Mortgage Insurance

Whether you have 20% equity in your home or less than 20% equity in your home, if you currently have a FHA insured mortgage loan, you can think about refinancing your current FHA insured mortgage loan to a Conventional Loan and avoid the high FHA annual mortgage insurance premium.  On another note, many homeowners who have purchased their homes several years ago during the real estate and credit meltdown in 2008 got their homes at rock bottom prices.  These lucky homeowners may not realize how much their homes have appreciated over the years and many do not realize that their homes have appreciated 20% or more.  Areas in California, Texas, Georgia, Illinois, Florida, Indiana and many parts of the country have seen home values appreciate double digits year after year.  If you have 20% or more equity in your home and you have a FHA home loan, you may want to refinance your FHA loan into a Conventional loan and avoid mortgage insurance altogether.  For homeowners with less than 20% equity and with a FHA loan, an analysis of refinancing their FHA loan to a Conventional Loan with Lender Paid Mortgage Insurance may be extremely beneficial.

Cash-Out Conventional Refinance Loan

If you have equity in your home, you may be eligible for a cash-out refinance mortgage loan with The Gustan Cho Team @ Gustan Cho Associates. Real estate values have sky rocketed in recent years and many homeowners do not realize that they home values are higher than they think. Contact The Gustan Cho Associates at to explore a cash-out refinance mortgage loan so you can consolidate your debts or use the cash from your refinance mortgage loan for home improvement.  You can get a cash out refinance conventional mortgage loan with up to 80% Loan to Value on Conventional Loans.

Conventional Refinance Loan Guidelines

Homeowners needing a Conventional Loan refinance mortgage need to meet Fannie Mae and/or Freddie Mac guidelines.  Minimum credit scores of 620 FICO credit is required for all Conventional Loan borrowers.  The maximum Conventional Loan limit is $424,100 unless the property is located in a high cost area where the Conventional Loan limits are significantly higher.  To get the best Conventional mortgage rates, you need a high credit score.  The best Conventional mortgage rates are for Conventional mortgage loan borrowers with credit scores higher than 740 FICO.  As your credit scores drop every 20 points, there is a negative price adjustment to your Conventional mortgage rates. Conventional Loan Borrowers with lower credit scores may want to maximize their credit scores to get the best available conventional loan mortgage rates.  Prior to refinancing, there are some quick fixes to boost and maximize your credit scores such as paying down your credit cards to 20% or less of your credit limit.

Gustan Cho NMLS 873293

Gustan Cho Associates

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