What Credit Score Do You Need To Refinance?
Many borrowers want to know what credit score they need to refinance. Credit scores play a significant role in determining what mortgage rate you qualify for when refinancing. There is no “one interest rate” that lenders quote each day because of the many factors that affect individual rates. Credit scores can drastically change the rate that lenders are able to quote borrowers for refinances. For example, a borrower with a 750 mid-score might have a rate as much as 1% lower than a borrower with a 670 mid-score.
The credit score you’ll need to refinance your mortgage into a lower rate also depends on the type of loan and the property type, as well as any specific guidelines or requirements your lender imposes. The best way to determine what rate you qualify for is to speak with your lender. In some cases, lenders can also help borrowers improve their credit scores by using the services of a credit repair company.
What Is A Refinance?
The two most common types of refinances are Rate and Term Refinances and Cash-Out Refinances.
Rate/Term Refinance:
A rate and term refinance is the refinancing of an existing mortgage to lower the interest rate or change the loan term (from a 7/1 ARM to a 30-year fixed, for example) without increasing the loan amount. A rule of thumb is that a Rate/Term Refinance makes economic sense if the closing costs can be recouped in four years or less. If a refinance is offered at “no-cost” to the borrower (something JVM Lending encourages in most cases), the “recoup analysis” is unnecessary.
Cash-Out Refinance:
A cash-out loan is the refinancing of an existing mortgage into a larger mortgage that changes the interest rate and the terms of the loan and advances cash to you. You can use the cash-out for anything, of course, including home improvements, tuition, and debt consolidations. Loan-to-value restrictions and credit standards are tighter for cash-out loans, and interest rates are usually higher. You also need to make sure you have sufficient equity to meet cash-out guidelines. Our experts are happy to assist with this determination with our free home valuation estimates.
How Does A Refinance Work?
The refinance process at JVM Lending is very easy, and our “Super Team” is available to walk you through every step of the process.
The first step of the refinance process is to have a preliminary conversation with a JVM Client Advisor. Client Advisors will send you a quote based on your goals, qualification parameters and discuss your refinance goals and options.
Next, our Client Advisor will review your loan and interest rate options after completing an online loan application. Once the online application is completed, you will be able to lock in a low interest rate with new and more desirable loan terms.
After, you will work with a JVM Mortgage Analyst to update and complete your loan file, order a new appraisal if one is required to cash out any home equity built, and package your refinance loan for review by underwriting and our Closing Specialists.
Finally, a JVM Closing Specialist helps address and resolve any additional requests or concerns from underwriting, set up your signing appointment, and ensure you are clear to close quickly and as smoothly as possible.
Contact JVM Lending’s Team
If you have any questions about what credit score you need to refinance or the refinance process with JVM Lending, contact our team by phone (855) 855-4491 and by email at jvmteam@jvmlending. Our team is available seven days a week for any questions or concerns about credit scores, refinances, and mortgage qualification.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167
