Conventional refinance rates are based on a refinance shopper's situation. Depending on risk factors, like credit score and income, a low-risk borrower could receive a better interest rate than another applicant. Generally, conventional loans are best suited for those with a credit score of 680 and above. You do not need a conventional mortgage to refinance, however.
With as little as 5% equity you can refinance any type of mortgage with a conventional loan:
Adjustable rate mortgages
Although HARP and FHA loans have reigned the refinance market, the standard conventional refinance is a viable go-to-option now that home equity is returning across the country.
If you have 20% equity in your home you will receive a traditional conventional refinance. With less equity your loan will subjected to meet HARP (home affordable refinance program) requirements. A HARP loan is a conventional refinance that allows you to refinance with little or no equity in your home.
With a conventional refinance borrowers can:.
Refinance a primary or secondary residence, or investment property
Turn home equity into cash at closing
Eliminate private mortgage insurance (PMI)
Cancel FHA mortgage insurance
Shorten the terms of the loan