Mortgage FAQs

How Does A Refinance Mortgage Work For You?

Refinancing a mortgage means that you are applying for a new loan to replace your existing mortgage loan. The choice to refinance a mortgage will likely be motivated by lowered mortgage rates, meaning the new loan will be more favorable and align with your personal and financial goals.This newly refinanced mortgage could offer financial stability, cash flow for other expenses, a shorter loan term and/or eliminating mortgage insurance.

Should I Refinance My Mortgage?

Depending on your goals, refinancing a mortgage can be the right decision. If you are looking to shorten your loan term, free up capital through a cash-out refinance, lower your monthly payment or move from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, refinancing may be the best choice for you. Homeowners should also plan to stay in their home for an extended period of time if they are going to go through a refinancing. There will be costs associated when refinancing your mortgage that you will have to be prepared for, such as closing costs and other fees, some of which can be rolled into your loan. The interest rate at the time of the refinancing can save you a significant amount of money, so choosing the right time to refinance is essential. A good mortgage refinancing rule of thumb is to refinance when you can decrease your rate by a full percent.

What Are The Top Reasons To Refinance Your Home?

There are a number of reasons to refinance your home, including:

  • Decreasing monthly mortgage payments with a lower-fixed rate.
  • Accessing higher monthly cash flow for other expenses.
  • Switching from an ARM to a fixed-rate mortgage eliminating variable rates.
  • Benefiting from equity you've earned in your home to pay for home improvements, education or debt consolidation.
  • Reducing the term of the loan to save money on interest in the long run.
  • Eliminating PMI payments incurred from a smaller down payment at the time of original home purchase.

A mortgage refinance calculator can help you determine what your payments will be if you do a mortgage refinance.

How Soon Can I Refinance After Purchase?

Typically, the amount of time after purchase you have to wait to refinance depends on the lender. Most lenders will base your ability to refinance on the amount of equity you have your home, rather than the length of time you've owned the home. Speaking with an experienced loan originator like Mutual of Omaha, can be the best way to discover when a mortgage refinance is right for you. However, there can be reasons to refinance within 6 months of purchase, including a steep drop in interest rates, change in marital status, significantly improved credit score, or a need to switch from a 15-year mortgage to a 30-year mortgage, or from an ARM to a fixed rate. Unless you paid cash for your home, it is often in your best interest to wait six months before refinancing.

What Is The Timeline For Refinancing?

The refinance process timeline will vary depending on the lender and how quickly you are able to provide documentation. Applying, processing, underwriting and eventual approval can take 30-90 days.

How Soon Can I Refinance After Refinancing?

When refinancing a mortgage, if you plan to do a cash-out refi, lenders may suggest waiting six months between mortgage refinances. Cash-out refinancing is a loan that pays off your mortgage, and a cash out refi can be for more than your existing loan allowing you to use the difference towards home renovations or other expenses. You must have significant home equity in order to do a cash-out mortgage refinancing.Rate-and-term refinancing, which is done to get access to more favorable interest rates or negotiate better terms, can be done as many times as it makes sense for your personal financial situation.

Mutual of Omaha Mortgage, Inc., NMLS ID 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108. Alabama Consumer Credit License 22123; Alaska Broker/Lender License AK1025894. Arizona Mortgage Banker License 0926603; Arkansas Combination Mortgage Banker/Broker/Servicer License 109250; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License 4131356; Loans made or arranged pursuant to a California Finance Lender Law license, 60DBO93110; Colorado Mortgage Registration 1025894; Connecticut Mortgage Lender License ML-1025894; Delaware Lender License 028515; District of Columbia Mortgage Dual Authority License MLB1025894; Florida Mortgage Lender Servicer License MLD1827; Georgia Mortgage Lender License/Registration 46648; Hawaii Mortgage Loan Originator Company License HI-1025894; Idaho Mortgage Broker/Lender License MBL-2081025894; Illinois Residential Mortgage Licensee MB.6761115; Indiana-DFI Mortgage Lending License 43321; Iowa Mortgage Banker License 2019-0119; Kansas Mortgage Company License MC.0025612; Kentucky Mortgage Company License MC707287; Maine Supervised Lender License 1025894; Maryland Mortgage Lender License 21678; Massachusetts Mortgage Broker and Lender License MC1025894; Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022452; Minnesota Residential Mortgage Originator Exemption MN-OX-1025894; Mississippi Mortgage Lender 1025894; Missouri Mortgage Company License 19-2472; Montana Mortgage Broker and Lender License 1025894; Nebraska Mortgage Banker License 1025894; Nevada Exempt Company Registration 4830. Licensed by the New Hampshire Banking Department, Mortgage Banker License 19926-MB; Licensed by the New Jersey Banking and Insurance Department. New Jersey Residential Mortgage Lender License 1025894; New Mexico Mortgage Loan Company License 1025894; North Carolina Mortgage Lender License L-186305; North Dakota Money Broker License MB103387; Ohio Residential Mortgage Lending Act Certificate of Registration RM.804535.000; Oklahoma Mortgage Lender License ML012498; Oregon Mortgage Lending License ML- 5208; Pennsylvania Mortgage Lender License 72932; Rhode Island Lender License 20163229LL. Rhode Island Loan Broker License 20163230LB; South Carolina BFI Mortgage Lender/Servicer License MLS-1025894; South Dakota Mortgage Lender License ML.05253; Tennessee Mortgage License 190182; Texas Mortgage Banker Registration 1025894; Utah Mortgage Entity License 8928021; Vermont Lender License 6891; Virginia Mortgage Broker and Lender License, NMLS ID #1025894 (www.nmlsconsumeraccess.org); Washington Consumer Loan Company License CL-1025894; Wisconsin Mortgage Banker License 1025894BA; Wyoming Mortgage Lender/Broker License 3488. Toll Free #: (877) 978-1922. Subject to Credit Approval. For licensing information, go to: www.nmlsconsumeraccess.org