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Refi OptionsConsidering a refi? There are several options available to you, but which one to choose? Are you aware of everything that is available to you so that you can make a well informed decision? Here are a few popular refi options and a little info about each.


The most common refi program is often referred to as a conventional refi. When your mortgage is backed by Fannie Mae or Freddie Mac, it is considered a “conventional” loan, so refinancing it is considered a conventional refi. With this program there are a few things to know:

  • An appraisal will be required.
  • You must verify your employment and all income.
  • You will have to show two years of employment.
  • You will need a credit score of 620 as a minimum.
  • You will need to pay for mortgage insurance (PMI) if you carry a loan balance greater than 80 percent of your homes value.

FHA Streamline

The FHA Streamline program is targeted at people who have a current FHA loan and are looking to lower their monthly payments. You can use this program more than once during the life of your mortgage if it financially benefits you. With this program you:

  • You do not need an appraisal.
  • There is no income verification.
  • Your credit score will not be checked, but your payment history will be taken into consideration.
  • The program features low fixed rate mortgages.

VA Streamline

The VA  Streamline program is similar to the FHA program, but is designed for veterans and active duty military personnel. Highlights include:

  • No appraisal.
  • No verification of income.
  • No credit score verification.
  • Low fixed rates.

Cash Out

Many lenders offer a cash out refi option. They each vary in the fine print, but here are a few of the common highlights.

  • An appraisal will be required. You will bear its cost.
  • Complete income and employment verification
  • 620 credit score or higher. Payment history will also be considered.
  • You will be able to borrow up to 85 percent of your homes value through the FHA, 80 percent for conventional lenders, and 100 percent through the VA.

While each of these refi programs has its differences, they all have one thing in common, the option for ”lender credit allowed to cover closing costs.” Do not pass up a freebie, let the lender pick up the tab for all closing costs.


About the author: Jerry Coffey


Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.


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