A conventional mortgage is one that is not insured by a government program, such as the VA or FHA. When you refinance into a conventional loan in New York or elsewhere, the process is pretty simple, but there are some things you have to keep in mind.


When you do a conventional refinance, there are some requirements you will have to meet that may be different than what you faced if you were in a government insured loan program. For example, such programs often have low down payment requirements and may allow borrowers to have lower income levels and lower credit scores than conventional loans. If your credit score is not above 720, for example, you may not qualify for the best interest rate, and if you don’t have 20 percent equity in your home, you may not be able to refinance without taking on mortgage insurance.


One of the biggest things to consider when thinking about a refinance is how it will benefit you financially. If you will lower your mortgage rate by at least 1 percentage point, then a refinance may be a good idea. Refinancing into a conventional loan might also let you get rid of mortgage insurance if you have enough equity in your home. Even if those conditions are met, however, there are still things to consider. For example, the closing costs on a conventional refinance are about the same as they are on a purchase, and in New York, the costs are among the highest in the nation. You need to make sure you will remain in your home long enough to recoup those closing costs.

Feel free to give us a call and speak to a refinance specialist who will guide you in the right direction.

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