Does my home's value impact my home's refinance?

It's important for consumers to understand how a determination of their home's value will or will not impact their ability to secure and close on a specific loan product.

A home's value is important for a wide variety of reasons:

• A loan may not be approved if the home's value is less than the principle on the loan
• A homeowner may have to pay for private mortgage insurance (PMI) if they do not have sufficient equity in the home. For example, some loans may require that the principle on the loan is less than 80% of the home's value in order to avoid the requirement for PMI.
• If the refinance is not just to lower an interest rate, but to take "cash out," the amount of the additional cash out funds will likely be impacted by the home's overall assessed value.
• A home's value may impact the ability of the homeowner to qualify for the loan itself, or to qualify for a lower interest rate.

However, there are many situations when a home's value is not an especially important factor in a refinance. For example, a homeowner may already have a signifiant amount of equity in the home at the time of refinance.

It's important for consumers to understand how a determination of their home's value will or will not impact their ability to secure and close on a specific loan product.

A home's value is important for a wide variety of reasons:

• A loan may not be approved if the home's value is less than the principle on the loan
• A homeowner may have to pay for private mortgage insurance (PMI) if they do not have sufficient equity in the home. For example, some loans may require that the principle on the loan is less than 80% of the home's value in order to avoid the requirement for PMI.
• If the refinance is not just to lower an interest rate, but to take "cash out," the amount of the additional cash out funds will likely be impacted by the home's overall assessed value.
• A home's value may impact the ability of the homeowner to qualify for the loan itself, or to qualify for a lower interest rate.

However, there are many situations when a home's value is not an especially important factor in a refinance. For example, a homeowner may already have a signifiant amount of equity in the home at the time of refinance.