A mortgage refinance can be performed on any standard mortgage loan.  Refinancing is the process of obtaining a new mortgage to replace or payoff an existing mortgage.  The only restriction that would prevent a borrower from applying for a new mortgage loan would be a condition in the loan contract of the existing loan that prevents an early payoff, and no standard or traditional mortgage loan will contain such a restriction. 

Existing borrowers can consider a refinance for a whole host of reasons including obtaining a lower rate, changing the type of interest rate, changing the loan term, using the current equity to obtain cash back, consolidate debt or multiple mortgages, or change or loan provisions such as eliminating private mortgage insurance.

While a borrower can apply to refinance any traditional mortgage loan, qualifying for a refinance is a whole separate issue.  Not all mortgage loan borrowers will qualify for a refinance regardless of the type of refinance the borrower is looking for. 

Many of the same procedures a borrower experienced when they obtained their current mortgage will be performed by the mortgage lender again when they refinance.  The mortgage lender will qualify the borrower based on general underwriting guidelines that evaluate credit, income, assets, loan amount, and the value and condition of the property.  There are special refinance programs that can alleviate the need for some underwriting rules such as refinances that do not require an appraisal or credit check.  But in general, the borrower that is applying for a refinance will have to qualify for the new mortgage through the refinance process based on standard underwriting guidelines.

Unfortunately for borrowers with less than perfect, too much debt, or a mortgage that exceeds the value of their home, refinancing can be difficult.  For customers that apply for a new refinance that have difficultly, try to ascertain why the loan the refinance loan was denied and work on finding a lender willing to do it.

All borrowers, regardless of their credit or income, should shop around for a home loan with multiple lenders to ensure they are get the best financing deal and the right home loan program for their budget and needs.

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