Homeowners

For owners weighing a new loan on the home they live in. A refinance is a new loan that pays off the old one. It brings a new application, a new Loan Estimate and closing costs again, and the term is chosen fresh. Refinance options include cash-out refinances into conventional, FHA and VA loans, and the streamline refinances for loans that are already FHA (FHA Streamline) or VA (the VA streamline refinance, IRRRL). Cash taken out, or debts paid off with it, raise the balance and become secured by the home. A HELOC or a home-equity loan reaches equity while the first mortgage stays in place, and either way the home secures the debt. A line of credit comes with its own disclosures instead of a Loan Estimate. The escrow lesson explains why the escrow part of a payment changes, and what happens to the old escrow balance in a refinance.