Refinancing your mortgage could serve any of the four purposes:
- Lowering your interest rate
- Changing your loan type
- Altering your loan repayment term
- Cashing out equity
Getting a mortgage refinance is similar to the process you went through to apply and qualify for a mortgage to buy your home. You'll complete an application, receive disclosures, and provide many of the same documents as before, plus details on your current mortgage. Depending on the type of refinance you choose, you'll likely need anywhere from 5% to 20% equity in your home to qualify. Keep in mind that if you have less than 20% equity, you may still be required to pay mortgage insurance.
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