Section 4: Cash-Out Refinance First-Time Homebuyers

NOTE: Maybe you are looking to do a Cash-Out Refinance and your home and this is the first and only home you have ever bought. Although that does fit the criteria for a first-time home buyer it is important to remember that Cash-Out Refinance are not traditional first-time home buyer programs. Although this section will talk about the benefits of being a first-time home buyer, please do not confuse this program if you are indeed a first-time homebuyer. 

 

Purchasing Your First Home

Purchasing a first home is an exciting milestone in any person's life. For some, the process may also seem very intimidating. Buying a home can be challenging for a first timer. After all, there are so many steps, tasks, and requirements, and you may be anxious about making an expensive mistake. But first-time homebuyers actually enjoy some special advantages created to encourage new entrants into the real estate market. Please don't hesitate to give us a call or start your quote online.

How Much Home Can I Afford?

Typically, the first question would-be homebuyers ask themselves is, "What can I afford?" There are many factors that determine what a reasonable mortgage payment should be for an individual, including annual income, existing debt payments, down payment (if any), as well as additional costs like homeowners’ insurance and housing association fees. Orbit Home loans provides a handy VA Loan Payment Calculator to help homebuyers find a monthly payment that's comfortable for them.

Cash-Out Refinance Payment Calculator →

Contact an Orbit Home Loan Professional

What Type of Loan Should I Get?

There are many financing options available for homebuyers out there, each with their own unique advantages. For most borrowers, we at Orbit Home Loans highly recommend the working with one of our loan officers to find out what best fits your needs. Of course, if you are still researching then you can continue to explore our many loan options here on our website.

Advantages of a VA Streamline:

1. Potentially lower interest rate

 Though cash-out refinance rates tend to be higher than rates for purchase loans, you might still end up with a lower interest rate if mortgage rates were higher when you originally bought your home. For example, in 2018, the average rate on a 30-year fixed mortgage went as high as 4.94%. These days, rates are considerably lower. (However, if you only want to lock in a lower interest rate on your mortgage and don’t need the cash, a rate and term refinance makes more sense.)

 2. Just one loan

 Since it's a refinance, you'll be dealing with one loan payment per month. Other ways of leveraging home equity require a second mortgage.

 3. Access to more funds

 Cash-out refinances are helpful with major expenses, like a home renovation or college tuition, because you generally can borrow much more than you could with a personal loan or by using credit cards.

4. Debt consolidation

 Using the money from a cash-out refinance to pay off high-interest credit cards could save you thousands of dollars in interest.

5. Higher credit score

 Paying off your credit cards in full with a cash-out refinance may build your credit score by reducing your credit utilization ratio — the amount of available credit you’re using.

Getting Preapproved

The first step toward securing your loan is getting pre-approved. This involves a prequalification process, where a loan officer assesses the homebuyer's financial situation and determines what they qualify for and is followed by the homebuyer submitting a completed loan application to the lender for approval. Orbit Home Loans offers two ways to begin this process: You may either call us directly or reach start the application below to get a complementary call. 

Contact an Orbit Home Loan Professional

Finding a Real Estate Agent

When using a Cash-Out Refinance, it's important to find a real estate agent that not only knows the intricacies of the Cash-Out Refinance Benefit Program, but also understands the specific needs of borrower. Orbit Home Loans has put together a network of friendly real estate agents for just this purpose.

Learn More about Orbit Realty →

Helpful Resources

•        The Guide to Cash-Out Refinance Homebuying
  Browse our Cash-Out Refinance homebuyer education and resources page.
•        Cash-Out Refinance Home Loan Mortgage Payment Calculator
  This free Cash-Out Refinance Home Loan calculator gives you a snapshot of what your monthly payments could be with a VA Loan.
•        Cash-Out Refinance Glossary
  Use our glossary to reference any unfamiliar terms or acronyms.

As a first-time homebuyer, you have many options when it comes to purchasing your home - including homes in high-cost areas.