Are you looking to lower the rate or monthly payment on your mortgage? Or maybe you have a sizable amount of home equity you’d like to tap into? Either way, a home refinance loan could be a smart financial move.
loanDepot is a reputable lender that offers a variety of options that could work for you. The mortgage lender is accredited by the Better Business Bureau (BBB) with an A+ rating and currently serves over 27,000 customers each month. The lender has also refinanced more than $179 billion in mortgages since its inception in 2010.
Read on to learn more about how the loanDepot refinance process works.
What Is Home Refinancing?
Home refinancing entails swapping your current home loan with a new one to lower your interest rate and reduce your monthly payment. Some homeowners also refinance their homes to convert equity to cash and consolidate high-interest debt, make a big-ticket purchase or meet another pressing financial goal.
How Home Refinance Loans Work
Like home purchase loans, refinance loans require you to go through the underwriting process to get approved. In addition, you’ll have to submit a formal application and send along income and asset documentation to be considered for a home refinance loan.
Here’s a breakdown of how the process works:
- Apply for a home refinance loan.
- Upon approval, the lender pays off your existing loan.
- You begin making mortgage payments to the new lender until your loan is paid in full.
Be mindful that you’ll pay more in interest over the life of the loan if the lender resets the loan term. However, the upside is your monthly payment could be lower and more affordable.
Or, if your credit score has improved since you took out the initial home loan, you may potentially qualify for a far lower interest rate. This means you could still save on your monthly payment without resetting the loan term.
Why Refinance A House?
Convert to a Fixed-Rate Mortgage
You can switch from an ARM to a fixed-rate mortgage to get a lower, set interest rate and a more predictable monthly payment.
Consolidate Debt
You can pull cash from the equity you’ve built up in your current loan to eliminate high-interest debt. Some people use their home refinance proceeds to repay credit card debt. You should compare interest rates before consolidating debt. loanDepot interest rates are competitive and can lower the monthly payments on your financial obligations.
Get Cash For A Major Expense
Some homeowners use cash-out refinance loans to cover the cost of major expenses or make a big-ticket purchase. Of course, you can budget accordingly and save money for some expenses, but medical emergencies and property damages are some expenses you can’t anticipate. A home refinance gives you immediate access to cash that can address your needs.
Types Of Home Refinance Loans
Fixed-Rate Mortgage
A fixed-rate loan comes with an interest rate that doesn’t change over time and a 30, 20, 15, or 10-year loan term. Consequently, your monthly mortgage payment (principal and interest only) will be more predictable.
Adjustable-Rate Mortgage
Adjustable-rate mortgages (ARMs) feature low-interest rates at the beginning of the loan term, followed by rate increases over time. They’re most suitable for borrowers who plan to move or refinance their mortgage in a few years. Some homeowners also get ARMs to save money in the beginning and focus on meeting other pressing money goals. You can also use this loan if you anticipate making more money in the future.
You can choose from a 10/1, 7/1, 5/1, or 3/1 ARM. The first number represents the number of years the interest rate is fixed. The second number is the frequency at which the rate will change following this period. To illustrate, if you get a 3/1 ARM, your rate will stay the same for three years and could fluctuate each subsequent year over the life of the loan.
VA Loan
VA loans are reserved for active-duty military and veterans who meet the eligibility criteria. They’re backed by the U.S. Department of Veterans Affairs and feature competitive rates and 100 percent refinancing. You won’t have to pay private mortgage insurance on these loans, even if you do not have 20% equity in your home. These loans also have lower closing costs and no prepayment penalties.
FHA Loan
FHA loans are backed by the Federal Housing Administration. These mortgage products are suitable for homebuyers with lower credit scores or who can’t afford to make a hefty down payment. You can qualify with a 580 credit score and put as little as 3.5% down. Homeowners with a credit score between 500-579 can still get approved for an FHA loan. These borrowers will need a 10% down payment. It’s more difficult for aspiring homeowners to obtain home equity loans or any type of mortgage with a credit score of 580 or lower.
You can also refinance your current loan with one of these products:
- FHA streamline refinance: a flexible loan program with less stringent guidelines and minimal document requirements that lets you reduce your mortgage payment
- FHA cash-out refinance: convert your equity into cash and use the loan proceeds however you see fit
What Do The loanDepot Refinance Reviews Say?
Each loanDepot review provides more insights into how the mortgage lender’s customer service has helped homeowners. We gathered a few loanDepot.com reviews to demonstrate how other customers have faired during the loan process.
- AJ and LoanDepot have been easy to work with and very knowledgeable. I would recommend it to family and friends. —Ellen G, Trustpilot review
- Lauren, it was a pleasure working with you. You and your staff were always professional, and we were always able to work through the difficulties to finally get the loan through. Thank you. —John Baiardi, Trustpilot review
- An amazing professional team helped me through the process from start to finish. Extremely helpful the duo of Blake Cook & Michelle Sams. Both are very knowledgeable and performed magic with numbers. We had to deal with some challenging & difficult circumstances, but they stuck with me to the very end. They treated me like family & I think I’m going to adopt them. They were so helpful in answering my questions and getting me through this process. I highly recommend their services. Thank you for a job well done. — Marti Stephan, Trustpilot review
Refinance Your House With loanDepot
If you’re ready to refinance your home, consider loanDepot to meet your needs. loanDepot refinance rates are competitive and include faster approvals and closing times than the industry average.
Want to discover how loanDepot can make the refinancing process easier? Get started by using the online form to connect with a loan officer in your local area.
