Planning to refinance but don’t know how to go about it? Refinancing can bring certain financial benefits to homeowners. Some homeowners feel that refinancing is a painful process, but it can ultimately ease some of your financial pain.
A Step-By-Step Guide to the Mortgage Refinancing Process
Here's a step-by-step guide to the mortgage refinancing process.
1. Getting the Right Support
It’s vital to consider a consultation from a mortgage expert before refinancing a home loan. Mortgage experts can help you decide whether refinancing a home loan is the right choice for you. Before refinancing, you should know the benefits of refinancing in relation to your goals. Ask yourself these questions first:
- Do you want to lower your existing interest rate and monthly payment?
- Do you want to reduce the term of your mortgage loan?
- Do you want to switch from an adjustable-rate mortgage to a fixed-rate mortgage?
After identifying your goals, consult a home loan officer for professional guidance. This can help reduce your interest rate, loan term, or change from an adjustable-rate to fixed-rate mortgage.
Refinancing may help you save money, but only if you find the right refinancing home loan. When you choose the right refinancing home loan that completely suits your financial conditions, you get a Net Tangible Benefit such as a lower interest rate or reduced loan term. Although refinancing is beneficial for a borrower, it comes with some costs.
2. Identify Which Loan Program Best Suits You
Today, there are numerous mortgage products available, and if you try to understand all of them by yourself, you might be liable to get confused. We advise you to get help from a mortgage loan officer who will help you identify the mortgage loan program that best suits you. You can completely rely on a mortgage expert to come up with suitable refinancing loans for you based on your goals, your qualifications, and your comfort.
Some of the most popular refinancing programs include:
Some of these refinancing programs offer no appraisal and mortgage insurance.
3. Lock-In a Refinancing Program
Once you choose a refinance program and decide to move forward, your mortgage expert will confirm your refinance loan program and rate of interest. This is a crucial step because it’s when your rate of interest will be locked-in to your contract.
4. Document Submission
After you’ve locked-in the refinancing program and rate of interest, you’ll receive a detailed list of requirements to be scanned, emailed, or faxed so that your information can be verified. To get your loan approved as quickly as possible, you’ll have to provide all the required documents within a given time period and also sign your initial disclosure. Your appraisal will be scheduled (if required) and you’ll be contacted to schedule a fixed date and time for the inspection. A quick appraisal schedule will help avoid any delays with your closing.
5. Processing, Underwriting, and Paperwork
Once all the documents are submitted, the processing, underwriting, and paperwork begin. This process usually involves a processor, underwriter, lender, title company, and insurance agent. After that, your income, assets, and all third-party items will be verified. Then, the processor will assemble all your details and submit your loan applications and related documents to the underwriter for approval. This is where your refinance gets approved. If any additional information is required by the underwriter, he or she will send you a request for the requirements. Make sure you provide all the required information in time for a fast closing. When you fulfill all the above conditions, you’ll receive a request for a final approval. Now, your loan documents are forwarded to the real estate attorney to prepare for closing.
6. Closing
“Closing” is the final step in the refinance process. The closing will either take place at the attorney’s office, your home, or any other place of convenience. Before closing the refinance process, your mortgage advisor will review the HUD-1 Settlement Statement that covers closing costs (if any). During the closing, you’ll also be reviewing and signing several loan documents. The closing agent will explain each document clearly and will answer any questions you may have. Once the signing is complete, the lender will review all the closing documents. Usually in about three working days, your refinance becomes official.
If you’re looking for a refinancing home loan in MA, Drew Mortgage Associates can help! Drew Mortgage Associates is a Boston mortgage lender that can help refinance to a low-interest rate or reduced loan term that best suits your financial goals. Our home loan originators are highly-trained professionals that can help you identify the best refinance program that fits your current economic condition. If you want to learn more about refinancing your loan mortgage, then please visit: https://www.drewmortgage.com/refinancing-mortgage/
