Refinancing Made Simple

Are you considering refinancing your mortgage? We have options for a variety of loan needs.

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Overview
Changing Term or Payment
Lowering Your Payment
Switching to Fixed Rate
Eliminating PMI
Tips for Refinancing
Loan Options

Overview

Are you considering refinancing your mortgage? We have options for a variety of loan needs

Changing Your Term or Payment

Are you looking to reduce your monthly mortgage payment, lower your interest rate, or pay off your loan sooner? Consider a well-timed mortgage refinance.

Lowering Your Payment

Paying too much on your current home loan? Put money back in your pocket by refinancing today.

Switching to a Fixed Rate Loan

Looking to switch from an adjustable-rate mortgage to a fixed rate mortgage? Switching makes the most sense when interest rates are low.

Eliminating Private Mortgage Insurance (PMI)

Say good-bye to PMI (Private Mortgage Insurance). Let us tell you how.

Tips for Refinancing

These simple steps can help with the process of refinancing a mortgage.

Loan Options

BBVA Compass has a variety of home mortgage loan options. Compare features, benefits and considerations for several loan types.

Changing Your Term or Payment

Refinancing to a shorter mortgage term may allow you to build your home equity and pay off your mortgage faster. Depending on the remaining interest left on your current loan and available interest rates, you may be able to save a significant amount in interest charges over the life of your loan with a shorter repayment term.

Lowering Your Payment

Lowering your monthly mortgage payments can have a positive impact on your budget. If you are among those homeowners whose original mortgage payment has turned out to be too high, refinancing your loan might help. When you refinance you can enjoy an increased cash flow as your loan’s monthly payment typically decreases with a lower interest rate. In addition, with a lower payment, you can use the extra funds for retirement savings, paying other debts, saving money for college, or other purposes.

Switching to a Fixed Rate Loan

Start saving money on monthly payments today.

While no one can predict whether rates will go up or down in the future, many homeowners are currently taking advantage of today’s low rates to refinance their adjustable-rate mortgage to a new fixed rate mortgage. If you are among those considering this move, read more about this loan.

Eliminating Private Mortgage Insurance (PMI)

Mortgage Insurance is typically charged when the loan-to-value (LTV) ratio of the home value to loan amount exceeds 80%. It's typically an amount added to the monthly payment until the loan balance is paid down to the right level.

There are a few ways a borrower can avoid this additional monthly charge. The easiest way to avoid it is by financing no more than 80% of the appraisal value, but BBVA Compass offers two more options.

A "Portfolio" loan that by design has no mortgage insurance. Not every borrower qualifies for this type of loan.

A "Combo Loan", which basically splits the home loan into two loans. The two loans combined plus the down payment amount equals the purchase price.

For example, assume the home's appraised value is $200,000 and the borrower has 5% equity ($10K). The combo loan will be composed of a first mortgage (which would be your first loan) at 80% of $200,000 ($160,000) and a second mortgage (which is your second loan or HELOC) of 15% of the appraised value ($30,000). Together $160K + $30K + $10K = $200K.

Tips for Refinancing

Chances are that over the course of a typical mortgage, you will have an opportunity to refinance. You may be looking to save money by lowering the interest rate or make monthly payments more manageable by stretching out the remaining loan term. Or perhaps you are looking to stabilize your monthly payments or obtain peace of mind by switching to a fixed rate mortgage. With so many factors in favor of refinancing, it is a shame that anyone would fail to refinance a mortgage just because the process can seem complex at first.

9 Easy Ways to Refinance a Mortgage

As with many things, refinancing can be broken down into a series of smaller steps, each of which is fairly simple on its own. For example, the following are ten tips that can help anyone refinance a mortgage successfully:

Specify the reasons for refinancing. Is the purpose of this refinancing to lower the interest rate, reduce the monthly payment, or lock in a fixed monthly payment, reduce the remaining term or get rid of PMI? The type and terms of the mortgage refinance needed will depend on which of these--or which combination of these--goals is in play.
Define the mortgage refinance parameters. Based on the above goals, set targets for interest rates and monthly payments. Decide on the mortgage term and whether to apply for a fixed or adjustable-rate mortgage. A mortgage refinance calculator can help define these parameters.
Check your credit rating. In particular, find out whether it has changed since you last applied for a mortgage. A low credit rating will affect the interest rate and the availability of a mortgage refinance.
Determine changes in property value. A drastic drop in property value can make it difficult to refinance a mortgage unless that mortgage is old enough to have been paid down substantially.
Research prepayment penalties on the existing mortgage. Some mortgages have penalties for early repayment, which includes refinancing. This is not necessarily a deal-killer, but it is important to know the amount of any penalty so it can be measured against the potential savings from refinancing.
Obtain mortgage refinance quotes from a variety of mortgage refinance lenders. Mortgage rates and lending standards varies from lender to lender, so it is well worth researching multiple mortgage lenders.Ask lenders for full disclosure of points, closing costs, and other fees. This will help with setting up apples-to-apples comparisons between mortgage lenders. For example, the lender offering the lowest interest rate may also be charging the most in points. When you pay "points," you pay interest in a lump sum upfront to get a lower rate on your fixed rate mortgage. Each point costs 1% of the mortgage amount. The more points you pay, the lower your mortgage rate. So, which is the best for you? More points and a lower rate? Or fewer points and higher rate? Try to request quotes with as nearly identical terms as possible for comparison purposes.
Ask lenders how long they will commit to their rate quotes. Lenders can't offer the same rate indefinitely, but they may commit to locking in a rate for a reasonable period of time to allow for the application process.
Use a mortgage calculator to compare monthly payment savings with closing costs and other upfront fees. Besides comparing mortgage refinance quotes against each other, also compare them against your existing mortgage. It is likely that there will be a trade-off between paying upfront expenses to refinance a mortgage and achieving a savings in subsequent monthly payments. It is important to make sure the savings in monthly payments will, in time, adequately compensate for the upfront costs.

Again, each of the above is a simple step on its own, and taken together they will help clarify the process of refinancing a mortgage.

Loan Options

Fixed Rate Mortgages

A BBVA Compass fixed rate mortgage can offer safety, security and peace of mind that keep your monthly principle and interest payments the same throughout the term of the loan.

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Adjustable Rate Mortgages

Adjustable-rate mortgages (ARM) are initially more affordable than fixed rate loans. And they can be a good deal if you know you're going to stay in your home for a relatively short period of time. But you run the very real risk that interest rates could rise sharply and drive up your monthly payments.

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Jumbo Loan

If you have a higher property value and can manage larger monthly mortgage payments a Jumbo (also referred to as non-conforming) loan may be a good choice for you.

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Government Loan Programs

Government loan programs also can make buying your first home a little easier. These programs can offer options such as low down payments, low closing costs, and easier qualification.

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HARP 2.0 (Home Affordable Refinance Program)

You may be one of the many homeowners who qualify to refinance at a lower rate and shorter term even if you owe more than your home is worth.

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Loans subject to program eligibility, collateral, underwriting and approval, including credit approval.

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