If refinancing your existing loan without taking cash out, you can take advantage of a streamlined process.
For VA loans, that means you will not need a Certificate of Eligibility (COE) with a straight refinance. If you want to refinance to a VA cash out, you will need to prove your VA eligibility.
A COE proves VA home loan eligibility through the Department of Veterans Affairs. To receive one, you must complete the appropriate government forms as well as your statement of military service. A COE can be obtained online through the VA benefits website and Freedom Mortgage can help you with all the details.
To get an FHA rate and term or cash-out refinance, you need to have an existing FHA home loan. You also need to be current on the last six months of payments and have a minimum of 210 days since the initial closing of the loan. Refinancing must also improve your position financially such as to a lower rate or term.
To be eligible for a USDA refinance, you need to currently have a USDA loan and have been current on payments for the last six months. The existing loan must have closed at least one year before your refinance request. There is no cash out opportunity with a USDA loan.
You can refinance any type of loan and any type of property with a conventional refinance. You need to be current on your mortgage payments and if you have a loan-to-value ratio of more than 80%, you will need to pay private mortgage insurance (PMI).
Your credit score
Your credit score is based on several factors, including how much debt you have, your credit history and whether or not you pay your bills on time. Your credit score can affect whether or not you'll meet the requirements for a loan.
You are eligible for a free annual credit report through www.annualcreditreport.com. Read through it carefully and make sure there are no mistakes. If there are any errors, follow the information provided to correct any accounts so that your report is as accurate as possible. You may order reports from all three nationwide credit reporting companies at the same time or you can stagger your requests so that you receive three free copies (one from each company) over a 12-month period.
The FTC’s website further notes that, starting this year and lasting through 2026, everyone in the U.S. can get six free credit reports per year by visiting the Equifax website or by calling 1-866-349-5191. That’s in addition to the one free Equifax report (plus your Experian and TransUnion reports) you can obtain at www.annualcreditreport.com. If you want a credit report that includes your credit score, you will have to pay a fee.
You may want to avoid opening a new credit card account or making any large expense purchases when applying for your home loan, as that could change your credit and may affect your eligibility.