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.
POS loans have become increasingly popular for people strapped for cash during the pandemic.
These short-term loans may be beneficial for consumers buying large items.
The concept of buy now, pay later has long had appeal. Credit cards make it easy.
But increasingly, people are choosing alternative point-of-sale (POS) lenders to fill that financial gap. More than 40% of American shoppers have used a buy-now-pay-later plan, according to Credit Karma/Qualtrics.
A POS loan is essentially the opposite of layaway. With layaway, you pay for your item over time and then take it home when you ve cleared your bill.
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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.