The various types of refinance mortgages
There are different types of refinancing loans available, and you can opt for the one that best suits your needs.
- Adjustable rate mortgages: This type of mortgage carries a fixed interest rate for 5 or 7 years, then changes each year depending on the market index. The adjustable rate mortgages typically start with a lower monthly rate than fixed rate loans, but then once the fixed rate period comes to an end, then the loan rate can either go up or down depending on the market conditions. You should be well prepared financially if you are going to opt for the ARM as both the payment and interest rate can go up at any time.
The fixed rate loan increases your protection from unexpected payments; thereby making it a safe bet. HARP refinance program: This program is also for the borrowers who own more than their house is worth. A streamlined, low documentation is required for this type of refinance mortgage. USDA Streamlined Assist: This is a new refinance loan project whose application process is quite simple. The eligibility to qualify for this loan is very relaxed, and it also ensures dramatically reduced fees for existing USDA borrowers. VA Mortgage payments: This mode of refinance mortgage is designed specifically for Veterans. It is approved by the Federal Government and is issued only by approved lenders. They come with quite flexible guidelines.
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