When refinancing a mortgage, essentially, you have two choices. If you refinance your existing loan to get a lower interest rate or change the terms, it is called a rate-and-term refinance. If you want to extract some of the equity in your home—perhaps to do a renovation, pay down debts, or help pay college costs—you may take a cash-out loan.
15-year loans may appear to save money over 30-year loans because they have a lower interest rate, but you may want to have the flexibility of a 30-year loan.
A rehab loan is also referred to as a renovation loan and it will allow property buyers to finance both the purchase / refinance and rehab of a property through one mortgage.
The amount of equity you have in your home is the portion of your home that you’ve already paid off. If your house is worth significantly more than what you still owe on your mortgage, you may be able to use that equity to pay for home improvements or renovations.
The Federal Housing Finance Agency announced recently the mortgage limit that will apply to conforming conventional and VA loans in 2021. We’ll cut to the chase and tell you that they’re increasing. The limit for 2021 is $548,250 for a 1-unit property, an increase of more than 7.4% compared to last year.