Question 1

What is a conventional refinance?

Accepted Answer

A conventional refinance replaces your existing mortgage with a new conventional loan — one that conforms to the guidelines set by Fannie Mae or Freddie Mac. Conventional refinances are available for primary residences, second homes, and investment properties, and can be used to lower your rate, change your loan term, or access your equity.

Question 2

Can I refinance from an FHA loan to a conventional loan?

Accepted Answer

Yes. Refinancing from an FHA loan to a conventional loan is a common strategy for homeowners who have built enough equity to eliminate FHA mortgage insurance. Once you have at least 20% equity, a conventional loan does not require ongoing mortgage insurance, which can lower your monthly payment.

Question 3

Can I eliminate PMI by refinancing?

Accepted Answer

Yes. If your home has appreciated or you've paid down your balance to below 80% of the home's current value, refinancing into a new conventional loan may allow you to eliminate private mortgage insurance (PMI) and reduce your monthly payment.

Question 4

What credit score do I need for a conventional refinance?

Accepted Answer

Most conventional refinance programs require a minimum credit score of 620, though a higher score typically gives you access to better rates and terms. During your consultation, we'll review your credit profile and identify the programs available to you.

Question 5

How much equity do I need to refinance conventionally?

Accepted Answer

Most conventional refinance programs require at least 5% equity (95% LTV) for a rate-and-term refinance. For a cash-out refinance, you typically need at least 20% equity remaining after the refinance. We'll review your equity position during your consultation.

Question 6

What is the difference between a rate-and-term refinance and a cash-out refinance?

Accepted Answer

A rate-and-term refinance changes your interest rate, loan term, or both without increasing your loan balance. A cash-out refinance increases your loan balance and provides you with the difference in cash. The right choice depends on your financial goals.

Question 7

How long does a conventional refinance take?

Accepted Answer

A conventional refinance typically takes 30 to 45 days from application to closing, though timelines vary based on the lender, appraisal scheduling, and documentation. Patron Mortgage works to keep the process efficient and keep you informed throughout.

Question 8

What are the closing costs for a conventional refinance?

Accepted Answer

Closing costs for a conventional refinance typically range from 2% to 5% of the loan amount and may include appraisal fees, title insurance, lender fees, and prepaid items. Some lenders offer no-closing-cost options that roll fees into the loan balance or rate. Your loan officer will provide a Loan Estimate before you commit.

Conventional Refinance Loans in California

Reasons to Refinance Conventionally

General Qualification Factors

Refinancing from FHA to Conventional

Explore Other Refinance Options

FHA Refinance

Cash-Out Refinance

HELOC

Frequently Asked Questions

Ready to Explore Conventional Refinance Options?