About The info
What is refinancing?
The term “refinance” is actually a bit misleading. When you refinance your mortgage, you’re not redoing it; you’re actually replacing your current mortgage with an entirely new loan. You could refinance with your current lender or work with a different lender completely.
Refinancing has a lot of advantages: It can allow you to lower your monthly payment, save money on interest over the life of your loan, pay your mortgage off sooner and draw from your home’s equity if you need cash.
How does refinancing work?
When you refinance your home, you’ll apply in a similar way to when you applied to purchase your home. In many ways, the process is like a less strenuous version of getting a purchase mortgage. In general, you’ll submit to a credit check, turn in financial documentation, submit to an appraisal and undergo the underwriting process. Typically, refinancing a mortgage takes as long as purchasing a home, averaging between 30 and 45 days.
Reasons to refinance your mortgage
You can get a lower interest rate. Whether your credit has dramatically improved since you first secured your mortgage or the market has changed, access to a lower interest rate can save you loads of money over the course of the loan. That said, in today’s rate environment, you’re unlikely to save significantly unless you got your original mortgage at least 10 years ago.
You can get a different kind of loan.
Maybe you want to replace the uncertainty of an adjustable-rate mortgage with a fixed-rate mortgage, or maybe you’re hoping to stop paying FHA mortgage insurance by switching to a conventional loan. Refinancing gives you the chance to explore all home loan types to find an option that works better for your finances.
You can use your equity to borrow more money. In addition to saving money, refinancing might help you access more funds. Cash-out refinancing allows you to leverage the equity you’ve accumulated to borrow more money. While this adds to your debt, it can help you secure funding for big expenses — a home improvement project or college education, for example — typically at a lower interest rate compared to credit cards or other loans.
You can shorten your loan. If you currently have 20 years left on a 30-year mortgage, for instance, you might want to refinance into a 15-year loan for a long-term savings opportunity. Your monthly payments could go up, but you’ll pay off your home faster.
How to refinance your mortgage
What happens when you refinance your home or rental property? The refinancing process is similar to the purchase mortgage application process: The lender reviews your finances to assess your risk level and determine your eligibility. Here’s what you can expect:
- Set a clear financial goal
- Check your credit score and history
- Determine how much home equity you have
- Shop multiple mortgage lenders
- Get your paperwork in order
- Prepare for the home appraisal
- Come to the closing with cash, if needed
- Keep tabs on your loan the entire process and help you make informed decisions.
Personalized Service
We believe in providing personalized service to each of our clients. We take the time to understand your unique needs and goals, and then tailor our approach to meet them. Whether you are a first-time homebuyer or a seasoned investor, we are here to help you achieve your real estate goals.