The Different Types of Home Loan Refinances

Loan Types
Refinancing your mortgage can be a great way to lower your monthly payment, but you have to know the differences between the most popular types of refinance options.
Published on
July 16, 2024
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Refinancing is a great way to save money and get lower monthly payments on your mortgage. However, there are different types of refinance options that can help you achieve your goals. Here are some of the most popular types:

Cash-out refinance

A cash-out refinance is a home loan refinance that allows you to take out extra money from your home's equity. You can use the money for any purpose, such as paying off credit card debt or buying a new car.

Some lenders will require that you have at least 20 percent equity in your home, while others will allow less than 20 percent but require PMI (private mortgage insurance). If you don't have enough equity, some lenders won't provide this type of loan.

If you're considering a cash-out refinance and aren't sure if your lender offers it, call them to find out more information and ask questions about how much they'll give us—you may be surprised!

Home equity refinance

If you have equity in your home, a home equity refinance is an option. This type of refinance allows you to borrow against the value of your home and use it for any purpose. You can use this money to pay off debt or consolidate multiple debts into one payment. If you're planning on buying a new house, this loan would allow you to get all the cash for it at once and not have to make payments on two homes at once. Or maybe you want to remodel your current home? With this loan, there's no limit on what can be done with the money!

A home equity refinance can also be used for other purposes such as paying for college expenses or using it as seed money for starting up a small business (you'll need to get approval from the bank first). This type of refinance will add a second mortgage and payment.

FHA streamline refinance

The FHA streamline refinance is a program offered by the Federal Housing Administration (FHA) to allow homeowners to refinance their existing FHA-insured mortgage. If you have an FHA-insured mortgage, this can be a great way to reduce your monthly payment and lower your interest rate.

The biggest benefit of an FHA streamline refinance is that it's very quick and easy. There are no credit checks or appraisals required, which means the lender doesn't need to pull your credit or evaluate what your home is worth before making you a loan offer.

Conventional to government refinance

By refinancing, you’re essentially rolling all of your current mortgage debt into one loan with a new lender. The biggest benefit to refinancing is that you can get more favorable terms on your loan and potentially pay less interest over time. Depending on the type of refinance, there are also other benefits like lowering your monthly payment or getting access to cash for home improvements or college tuition without having to take out another loan.

On the downside, refinancing may require additional costs like application fees and closing costs that weren't present when the original mortgage was taken out. And even if it doesn't cost much (or anything), it still takes time—and sometimes patience—to complete a successful refinance process from start to finish.

VA streamline refinance

If you have a VA loan, the VA streamline refinance is a great option. The benefit of this program is that it's easy to qualify and get approved for. A veteran can qualify even if they've had previous financial issues or declare bankruptcy on their mortgage at some point in the past.

The process also moves quickly—there are no fees associated with closing on your new loan, since it uses existing funds from your existing VA loan as part of the transaction.

USDA streamline-assist refinance

The USDA streamline-assist refinance is a great option for borrowers who want to get cash back or lower their monthly mortgage payments. You must be eligible for a USDA loan and have low debt. If you think this may be the right option for you, let us help you determine if it’s the right move for your budget

There are a lot of ways to approach refinancing your home loan.

There are a lot of ways to approach refinancing your home loan. The most important thing to remember is that the best refinance option for you depends on your personal circumstances and goals. That’s why it’s important to think about what you want out of the deal, who is going to be paying off your existing loan and if there will be any changes in interest rates when you take out a new one.


We hope you found this article helpful and that it answered any questions you may have had about the different types of home loan refinancing. As always, if you have any additional questions or just want to discuss your options with someone in person, please contact us today!

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