Conventional refinancing: lower your rate, pull cash or drop mortgage insurance.

Rate and term

Replace your loan to lower your rate, change your term, or remove a co borrower. A limited cash out version allows a small amount of cash, generally the greater of 2% of the loan or $2,000, and can be used in some cases to buy out a co owner after a divorce.

Cash out

Borrow against your equity, generally up to 80% of value on a single unit primary home, and less on multi unit and investment properties. The existing loan generally needs to be at least 12 months old. Cash out carries higher pricing than rate and term, so it's worth comparing with a HELOC.

Delayed financing: the investor's tool

If you buy a property with cash, conventional guidelines can allow a cash out refinance within about six months to recover what you paid, without the usual seasoning wait. For investors who buy with cash and want their capital back quickly, it's a powerful option.

Leaving FHA or USDA

The most common reason FHA borrowers refinance is to drop lifetime mortgage insurance. Once you reach about 20% equity and your credit supports it, conventional removes it. See FHA refinancing and USDA refinancing.

Removing PMI without refinancing

If you already have conventional PMI, you may not need a refinance at all. You can request removal at 80% of original value, or sooner based on appreciation under your servicer's rules. See PMI.

How I use refinancing on my own properties

I learned to grow my portfolio by buying, renovating, renting and refinancing, then doing it again. The refinance is where the plan works or fails. Know what the property needs to appraise for, and what it needs to rent for, before you buy. See investor financing.

Is it worth it?

Divide your closing costs by your monthly savings. If you won't keep the loan that long, wait. And don't reset a loan you're years into back to 30 years without asking about a shorter term. See the true cost of a mortgage.

Veterans

Compare a VA cash out, which commonly goes up to 90% of value, or an IRRRL.

Cash back after a cash purchase

Andre bought a duplex with cash at auction and renovated it. Four months later, a delayed financing cash out refinance returned most of his purchase price, and he used it toward his next property.

Out of FHA

Sofia bought with FHA four years ago. With 22% equity and a 730 score, she refinanced into conventional at a similar rate, eliminated her mortgage insurance and lowered her payment.