This seems to be a common question among homeowners as interest rates are at an all-time low. Many Americans are currently scrambling to try and figure out exactly what they need to do in order to refinance and lock in a better rate than the one they may currently have. Luckily refinancing your home is a lot easier than you may think. Try following these steps to ensure you have a successful and stress-free refi!
Step 1: Refinancing Options
There are a few different options when it comes to refinancing. Rates, terms, and cash-out options should all be discussed with your lender to ensure you are getting the option that suits your personal needs.
Step 2: Finalize Your Rate
You will want to lock in your rate as soon as possible so that you don’t have to worry about a last-minute change taking place. Rates can change daily pending on the current market, which is why it is vital to lock your rate in immediately. Even with a locked rate, rest assured you can still make changes to your applications or change the structure of your loan if needed.
Step 3: Documentation
The type of documents you may be required to submit will vary from lender to lender, however, the general documents you can expect to be asked for include, but are not limited to, tax returns, W2s, bank statements, as well as any child support or alimony payments.
Step 4: Underwriting
During this step your documents will be reviewed and any additional needed documents will be requested. You may also be required to disclose and explain any revolving debt such as credit cards that weren’t recently provided in your statements, or were recently opened. This is the time to ask any and all questions if you have them.
Related: 5 Hidden Costs When Buying a Home
Step 5: Approval
Your approval to refinance takes place once all of your documents have been reviewed, generally speaking this only takes a few business days, however, with more complicated loan terms you may be waiting up to two weeks. At this time, you will be contacted with your approval notification and will then work to set a closing date for the new loan start date.
Step 6: Closing
Now that your loan has been approved and documents have been submitted it is time for you to review and sign your disclosures. Viola! Now that you’ve signed the disclosures you have officially completed your refinance.
The time it takes to refinance a home varies pending on each lender, however, if you are hoping to refinance your home as soon as possible make sure that you stay on top of the requests sent to you for documentation, questions, or signatures to help the refinancing process move both smoother and faster.
For more information on selling, purchasing, or refinancing real estate, please feel free to contact our office at any time.