Cash-in
Can pay a lot of money at once
No-closing-cost
Can make higher monthly payments
Streamline
Have an FHA, VA, or USDA mortgage
FMERR or HIRO
Have a conventional mortgage
1. Rate-and-term refinance
A rate-and-term refinance is probably what you think of as a regular refinance. You replace your original mortgage with a new one with different terms. Your interest rate and monthly payments will change, and you ll probably refinance into a new term length.
Conventional, FHA, VA, and USDA mortgages are eligible for rate-and-term refinancing. You ll need a certain credit score, debt-to-income ratio, and amount of equity in your home â but the exact requirements will depend on which type of mortgage you have.
Who is eligible?
Not everyone qualifies for a regular rate-and-term refinance. You ll need to meet the following criteria:
Home equity. Many lenders want you to have at least 20% equity in your home.
Credit score. The minimum credit score will depend on which type of mortgage you are refinancing. A conventional mortgage requires at least a 620 score.
Debt-to-income ratio. The DTI ratio you ll need also depends on which type of mortgage you have. Most lenders will be happy if your ratio is 36% or lower.
There s some flexibility with these requirements. For example, a lender may approve you to refinance with a higher DTI ratio if you have an excellent credit score or more than 20% equity.