Refinance FAQ
How do I refinance my existing home loan?
To refinance your loan in order to obtain a lower interest rate and start saving on your monthly payments, ditech can offer you the following loan products with the security of fixed-rate payments:
15-Year Fixed-Rate Refinance
Choose this if:
- You want a shorter loan life and lower rates
- Low monthly payments are not a priority
- You're planning to stay in your house for more than 10 years - especially if you're planning to completely pay off your loan
ROLLDOWN OPTION
Our rolldown option allows you to refinance with few upfront fees! While the rate is slightly higher, you will pay few upfront fees to get your new loan. In effect, as long as our rolldown rate is lower than your existing rate, it makes financial sense to refinance because there is little or no cost in doing so.
CASH OUT OPTION
If your equity in your property qualifies, you can refinance with a loan amount greater than your current mortgage - and keep the difference! Use it for home improvement, debt consolidation, or whatever you want.
30-Year Fixed-Rate Refinance
Choose this when:
- You want low monthly payments that do not change
- You want a loan that's generally easier to qualify for
- You're planning to remain in your house less than 10 years
- You want the maximum tax advantage (please consult your tax adviser)
How do I calculate the value of my property?
Since a mortgage is a loan secured by a piece of real property, a crucial factor is in the correct value of the property in question.
Property value can be determined in a number of ways:
- The market value of the property - that is, what a buyer will pay for it and what other comparable properties (comps) in the neighborhood have recently sold for.
- The appraised value of the property - that is, what a trained and licensed professional deems the property to be worth based on an inspection, comps, and a thorough analysis of the property and its neighborhood.
Additionally, the appraiser estimates the replacement value of the property - that is, the cost to build a house of similar size and construction on a vacant lot. The appraiser reduces this cost by an age factor to take into account deterioration and depreciation.
Can I make extra principal payments so I can pay off the loan more quickly?
Depending on the loan, and what your state permits, it is feasible for you to make extra payments on the loan. Extra payments will have an effect on the amortization schedule over the remaining term of your loan.
What is a cash-out option?
If your equity in your property qualifies, you can refinance with a loan amount greater than your current mortgage - and keep the difference! Use it for home improvement, debt consolidation, or whatever you desire.