What Is The Refinance Process?
Refinancing your mortgage is a smart decision for many reasons, like lowering your interest rate, cashing in on your home’s equity, and lowering your home’s mortgage loan term. The refinancing process is often less complicated than the home buying process, although it includes many of the same steps. Here is how the process works:
Applying: When you apply for a refinance, we as a mortgage lender will ask for the same information you gave us when you bought the home. We will look at your income, assets, debt to income ratio and credit score. Here are some of the documents that we might need:
- Two most recent pay stubs.
- Two most recent W-2s.
- Two most recent bank statements.
We will also need your spouse’s documents if you are married. You might be asked for more income documentation if you are self-employed.
Appraisal: In some cases, an appraisal will be required to determine your home’s market value at this point in the refinance process. A non-biased, third-party appraiser will go through your home, making note of features, amenities, structure, number of bedrooms, property, and other factors that affect the value of your home. In most cases, the borrower will pay for the appraisal, which usually costs between $300 and $600. The appraisal will then be sent to your lender so that they can verify that the home you are to refinance doesn’t have less market value than the refinance loan you’re about to take out.
Underwriting: Once you submit your application, we begin the underwriting process. During underwriting, we will verify your financial information and make sure that everything you have submitted is accurate.
Approval: Once the underwriter approves the loan, you will receive an approval letter with the new loan terms. You will also receive information on how to schedule your loan closing, which will be very similar to that of when you first bought your home. In addition, you will be given an exact amount for your closing costs, which will need to be paid at your closing.
Closing: The closing is the final step of the refinance process. You will meet with us or at a title agency to sign the papers and pay any necessary closing fees.
Knowing what to expect during the refinance process can help to make it go by quickly and smoothly. For more information on home refinancing, give us a call or schedule a free consultation with us. We can advise you on your next steps. Schedule Here.
© 2021 Premier Mortgage Resources, LLC | NMLS #1169. Equal Housing Lender. Not an offer to extend credit or commit to lend. All information contained herein is for informational purposes only and, while every effort has been made to ensure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs, and underwriting policies are subject to change without notice. The material presented in this publication is for information purposes only and not intended to advertise or solicit real estate business. This is not an offer to extend credit or a commitment to lend. All loans are subject to underwriting approval. Some products may not be available in all states and restrictions apply. PMR is licensed in AZ, CA, CO, HI, ID, KS, MN, MT, MO, NV, OR, UT, WA, and WY. California Licensed by the Department of Financial Protection and Innovation, under the California Residential Mortgage Lending Act.