Refinancing to shorter term and savings
Frequently Asked Questions
Straight answers to the questions we hear most.
A recast and a refinance are fundamentally different. A recast keeps your existing loan intact—same lender, interest rate, and loan term—and only lowers your monthly payment by re-amortizing the principal. A refinance replaces your old loan with an entirely new one, which can change your interest rate, term, and monthly payment, but it involves credit checks, closing costs, and fees, unlike a simple recast.
Front-End DTI: This ratio only includes housing-related expenses. It’s your projected total monthly mortgage payment (principal, interest, taxes, insurance, and any HOA fees) divided by your gross monthly income.
Back-End DTI: This is the more commonly used ratio. It includes all your monthly debt obligations—such as your future mortgage payment, auto loans, student loans, credit card payments, and child support—divided by your gross monthly income.
Back-End DTI: This is the more commonly used ratio. It includes all your monthly debt obligations—such as your future mortgage payment, auto loans, student loans, credit card payments, and child support—divided by your gross monthly income.
A Home Equity Loan is a lump-sum loan with a fixed interest rate and fixed monthly payments, functioning like a second mortgage. A HELOC (Home Equity Line of Credit) is a revolving line of credit with a variable interest rate, allowing you to borrow, repay, and borrow again up to your credit limit, similar to a credit card.
Be Proactive: Submit all requested documents quickly and completely.
Be Honest: Disclose all financial information accurately from the start.
Avoid Major Financial Changes: Do not open new credit cards, take out new loans, or make large, undocumented deposits into your accounts during this time.
Stay Employed: Do not quit or change your job.
Respond Promptly: Answer any questions from your loan officer or underwriter as soon as possible.
Be Honest: Disclose all financial information accurately from the start.
Avoid Major Financial Changes: Do not open new credit cards, take out new loans, or make large, undocumented deposits into your accounts during this time.
Stay Employed: Do not quit or change your job.
Respond Promptly: Answer any questions from your loan officer or underwriter as soon as possible.
If your rate lock expires before your loan closes, you will typically lose the locked rate. You will then be subject to the current market rates at the time of closing, which could be higher. In some cases, you may be able to pay a fee to extend the lock, but this is not guaranteed.
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