Are you looking to save money on your mortgage payments or tap into equity in your home? We’ll be exploring the basics of refinancing a home – what it is, why people refinance their homes, and how to go about it. Refinancing can be a helpful way to decrease monthly payments and overall costs associated with home ownership. However, there are some expenses and risks that may also come along with refinancing; so before anything else, being informed on the process is key if you’re going down this path. 

Get All the Info You Need First

Man in suit holding calculator for refinanceWhen looking to refinance, the process often begins with gathering necessary documents and financial information. This could include proof of income, tax returns, bank statements and credit report history. This can be done either on your own or in conjunction with a professional refinance advisor. Before starting this process, it is important to be organized and methodical so that nothing important is left out of the equation. Doing this sort of up-front ‘refinance homework’ can save a lot of time once the refinance paperwork has been completed.

Research Lenders

Talking to your lender and shopping around for refinance rates is an important part of the refinance process. It can often be confusing and overwhelming to compare lenders, refinance rates, and determine which refinance option is right for you. When talking to a lender, it’s important to ask questions about origination fees and closing costs so that you know exactly what you’re signing up for before moving forward. Taking the time to do research like this can save you thousands in the refinance process. Doing your due diligence may seem intimidating at first and a lot to do, but it pays off overtime in the long run.

Get Pre-Approved

Before applying for a refinance loan, it’s important to get pre-approved. Getting pre-approved can provide insight into your refinance loan eligibility, the amount you can borrow and what interest rate you may be offered. It’s also a useful tool for negotiating the refinance process when dealing with lenders. With a pre-approval sorted out, you have greater certainty in moving forward with negotiations as you have proven that you have been verified for creditworthiness. Taking the time to get pre-approved is well worth it given the terms of many refinance loans can significantly impact your budget on a long-term basis.

Waiting for the Lender

House and money bag on balanced scalesApplying for a refinance loan can be anxiety-inducing, especially as potential home owners wait for their lenders to approve the application. To make it easier, it helps to know how long this process takes – typically, lenders take around 30 days to review a loan application and decide whether to refinance. However, the length of time for refinancing may vary depending on the complexity of your refinance; if you’ve got multiple financing sources the approval process could take longer than thirty days. Rest assured that your loan officer will stay in communication with you throughout the refinance process and help you get an answer as soon as they can.

Finalizing the Refinance Process

After refinance paperwork is submitted and approved by the lender, property appraisals and inspections may need to be completed. An appraisal will help establish market value for the home and give lenders their required collateral and loan-to-value ratio. Inspections identify any potential issues with the home, such as those found with plumbing, electrical components or the condition of the roof. Both appraisals and inspections help protect homeowners by ensuring they understand what safety issues may be present in their home, prior to refinance. Once these steps are complete, borrowers can feel confident that necessary information has been collected and refinances can move forward.

Get Refinance Help from Union Capital Mortgage!

Union Capital Mortgage can help you with the refinance process and any step of the process. Visit our website today or call (440) 585-5626 today for more information!