3 Tips & 3 Qwips when it comes to Refinancing Your Home
Get what you want and understand the financial strength your home provides. With all the buzz about low mortgage interest rates, here are three things to consider when planning to refinance.
*Refinancing an existing loan may result in an increase of the consumer's total finance charges over the life of the loan.
- Set your financial goal. Do you want to reduce your monthly payments*, pay your loan off quicker, or remove your current home loan’s mortgage insurance? A professional mortgage consultant can help you compare these options and suggest refinance loan product options to help you meet your short- and long-term financial goals.
- Estimate the amount of your home’s current equity. Equity is defined as the amount you’ve repaid on your mortgage, plus any increase in your home’s appraised value. To get a general idea of your current equity, check your mortgage statement to see how much you currently owe. Next, research your home’s current value. You can do this online by locating homes for sale or that recently sold that are similar in size and location to your home, or you can ask a real estate agent to provide an analysis.
- Lock your rate. A good loan officer will discuss interest rates with you, but you determine when to lock your rate. Selecting a lender with a reputation for closing loans on time will help to ensure your loan closes before the rate lock expires.
- Work with a lender that can verify your employment, income and assets electronically. Don’t go looking for statements and a fax machine, true digital mortgage technology allows you to provide this information with a few mouse clicks. And beware of lenders who ask for bank passwords to pull financial statements on your behalf.
- Save money and close faster without an appraisal. You may be eligible for a property inspection waiver which uses past appraisal data on your home and neighborhood.
- Closing on your new loan can take minutes not hours with e-document closings. Sign most of the documents online without costly errors. On closing day, a few ink signatures and you are on your way.
*Refinancing an existing loan may result in an increase of the consumer's total finance charges over the life of the loan.