Step 1 – Is a Refinance Right for you?
A one on one personalized consultation with a trusted mortgage advisor can help you decide if a mortgage refinance is right for you. In order to determine the benefit of a potential refinance it’s important to know what your goals are.
- Lower your rate and monthly payment
- Pull cash out for debt consolidation or home improvement
- Convert your 30 year to a shorter term loan
- Change an adjustable rate to a fixed rate
Just how much you can save will determine if refinancing is the right choice for you. By getting pre-approved upfront, you will know how much your monthly savings will be but more importantly how much total interest you can save over the life of the loan. This “net tangible benefit” calculation depends on many factors, such as credit score, equity or no equity, current loan type, time remaining on existing loan, and your current rate. Although refinancing will certainly come with some costs, by following these steps you will know the approximate break-even point on the expense vs. total benefit of refinancing. Once you have this information you can confidentially choose a loan program that is best for you and will help you achieve your goals.
Step 2- Determine Which Loan Program is Best for You
With all the options available today, you need expert advice to help you choose the right program for your unique situation. Your trusted mortgage advisor will be able to come up with several loan options based on your goals, what you qualify for, and a mortgage plan you feel comfortable with. Below are just a few popular programs that can help you refinance.
- HARP 2.0
- FHA,VA and USDA Streamline
- Conventional and Jumbo
Some of these programs offer no appraisal, no mortgage insurance and many do not even require any equity to qualify.
Step 3- Time to Lock-In
Once you choose a program and decide to move forward, your trusted mortgage advisor will confirm your loan program, rate, and payment and will answer any questions you may have. This is the time when your interest rate will be locked-in to guarantee your offer and protect you against any market fluctuations. Typically your rate will be locked for a period of 30 days or less to provide ample to time to complete your refinance.
Quick Note: An FHA, VA or HARP 2.0 refinance can be complete in as little as (15) days in some cases.
Step 4 – Submission of Documents
After you are locked-in you will receive a detailed list of items needed to be faxed, scanned or emailed so your information can be verified to get your loan approved fast. This document request is time sensitive and is a priority to get back quickly to ensure an on time error free closing. You will also be required to sign your initial disclosures at this stage which will detail the terms of your loan. Once complete, your appraisal will be scheduled (if required) and you will be contacted to schedule a date and time for the inspection. Getting the appraisal scheduled quickly is an important step to avoid any delays with closing later in the process.
Step 5 – Processing, Underwriting and Paperwork
Once all the requested items are in, the processing, underwriting and paperwork period begins. This involves the processor, underwriter, lender, title company, insurance agent, etc. At this point you’re income, assets and all 3rd party items will verified. The processor will then assemble all this information and then submit your full loan file to the underwriter for approval. Your refinance will then get approved with conditions. Additional information will then be requested from you to satisfy any underwriter requests. Be sure to provide everything requested in a timely manner to be able meet your closing timelines. When all conditions are met, you will receive your final approval. At this stage your loan documents are drawn up and forwarded to the real estate attorney to prepare for closing.
Step 6 – Closing
Closing is the last step in the refinance process. The closing will take place at the attorney’s office, your home or any other location at your convenience. Before closing, your trusted mortgage advisor will review the HUD settlement statement with you that covers the funds needed at closing (if any), and other final details. During the closing you will be reviewing and signing several loan papers. The closing agent will explain each document clearly and will be available to answer any questions you have. Once signing is complete the lender will review all the closing documents and (3) business days later wire the funds needed to make your refinance official.