Legal Disclaimer Mortgage scenarios described on this website may reflect interest-only, adjustable rate mortgages, in addition to other conforming loan products. Lenders in our network may determine the lowest rate available to you based on individual variables including, but not limited to, self-stated credit rating, collateral, and ability to repay. Explaining Refinance Loans Refinancing is the process of renegotiating your existing mortgage agreement. This process may include increasing or decreasing the principal or paying out the mortgage in full, depending on the terms of the loan. Renewal at the end of a mortgage term, the mortgage may "roll over" on new terms and conditions acceptable to both the lender and the borrower. This is known as renewing a mortgage. If satisfactory terms cannot be agreed upon, the lender is usually entitled to be repaid in full. In this case, the borrower may seek alternative financing. Explaining Home Equity Loans Home Equity loans are sometimes referred to as a second mortgage or borrowing against your home. The loan allows you to tap into your home's built-up equity, which is the difference between the amount your home could be sold for, and the amount that you still owe. Homeowners often use a home-equity loan for home improvements, to pay for a new car, or to finance their child's college education. A home-equity loan is a good way to borrow money. Explaining Purchase Loans A purchase loan is a loan for a new property. Borrowers may or may not have an existing home or property in order to qualify for a new home loan. Usually lenders will ask for collateral in the form of a down payment or other assets in order to qualify for a new home loan. Credit worthiness usually an important factor when determining eligibility for a Purchase loan. Credit Importance You do not have to have good or excellent credit to qualify for a loan. Participating lenders may qualify you for a loan based on many independent variables, one of which is credit. However, having better credit will typically give you access to a greater selection of loan products from a given lender. This is a Free service This website is a free, no-obligation service.