Refinance

Your Mortgage Loan Refinance Guide

 

To paraphrase Charles Dickens, it’s been the best of times and the worst of times for homeowners and property investors who want to refinance their loan.

Interest rates are at historic lows, which means there’s been no better time to refinance most mortgage loans. Unfortunately, the recent foreclosure crisis has tightened underwriting rules and driven many home values “under water.”

Nevertheless, there are opportunities and options for all homeowners looking to refinance. This guide contains several articles with tips and strategies for finding the best mortgage refinance for all situations:

 

The Refinance Loan Process

When you refinance your mortgage loan, you’re actually replacing your current mortgage financing with a new mortgage loan. Even if you don’t currently have a mortgage on your property, any new loan to take out cash would be considered a refinance loan.

In many ways, a mortgage refinance loan follows a very similar path as the purchase mortgage loan you used originally to buy your home. The big difference is that there is no seller or real estate sales contracts involved. You already have the property, and you’re the owner. The only thing you need is a new mortgage loan.

Successful mortgage loan refinances usually follows these steps:

  1. Consider whether it’s worth it. Unless you’re pulling cash out of your property’s equity or lowering your loan term, refinances are usually only worth the effort if your current mortgage is less than five years old. If you’re replacing your current 30-year fixed-rate mortgage loan with another 30-year term, then the payments you’ve made to date will be wasted.
  2. Analyze your situation. The mortgage environment has probably changed dramatically since you bought your home or obtained your current mortgage loan. There are always alternatives, but you need to be honest about your current situation. Before you start shopping for a refinance loan, take the time to consider your current employment, income, credit and property value situation.
  3. Compare interest rates. The web has put more power in your hands. Take advantage of it to compare interest rates from competing mortgage lenders to get a clear idea of current interest rates.
  4. Get preapproved for a refinance. Once you have found an interest rate that works for you, apply for a preapproval with that mortgage loan provider.
  5. Assist loan processing. Your preliminary mortgage loan approval will come with several conditions that must be satisfied before the eventual mortgage loan closing. During this period, you will need to assist your mortgage lender process your loan application to final approval.
  6. Close the loan. Once your approval is finalized, your mortgage loan provider will schedule a settlement (closing) to sign all the refinance loan documents and replace your current mortgage loan with the new one.

For more information about and a detailed review of the Refinance Loan Process, click here.

 

 

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