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There are many reasons that you might to refinance your loan, but it is usually for two different reasons – one is to lower your interest rates, and therefore you monthly payments. The other main reason is to shorten the time you are paying on your loan, therefore lowering the total amount of your loan. Again, there are many other reasons, but these are the two main reasons.
You can search online for a great lender to help you to refinance you loan. If you want to søke refinansiering or apply for refinancing, you will want to find a reputable lender. Reputable lenders are easy to find if you do the research. Just be careful to read any online reviews to see how reputable the business is. They can have one or two bad reviews and still be very reputable because not everyone is going to like every business.
This article will walk you through the steps to refinance your loan and reduce the amount that you ultimately pay. You can do more research to find out more information, but this will give you a head start. You can do a lot with the information from this article, especially if you have a reputable lender that will help you through the steps.
Steps for Applying for Refinancing
Applying
You will first need to decide which type of refinancing that you want to do. As you apply, your lender will ask you for the same information that they asked when you first financed your home. They will look at your credit history and credit score and they will want to see your income. They will also ask for your other assets to see if you will qualify for refinancing your home. You will need to have paperwork such as your last two paystubs, your last two W-2’s, and your last two monthly bank statements. You will need to ask your lender if there is any more paperwork that they might want.
You will also need to have the same type of information from your spouse, especially if you live in a community property state. If you are self-employed, the lender will ask for more tax information to prove your income. They will probably need to have at least two years of tax information prior to lending you any money.
You can choose a new lender if you wish, you don’t have to use the same lender that initially financed your home. You might want to shop around to find the best interest rates and other fees that might be added. You could end up saving hundreds of dollars throughout the term of the loan.
Lock In Your Interest
Once you are approved, you will be asked if you want to lock in your rates or if you want them to float. If you lock them in, the rates won’t change – if you want them to float, you interest rate can get lower or higher depending on where the average rates are going.
You can lock in your interest rate for 15 to 60 days, depending on your lender. If it takes longer than that to do all your paperwork and finalize your loan, the rate can change, and you might be charged more money. You can look here for the current interest rates: https://www.rocketmortgage.com/mortgage-rates. You will want to finalize all the paperwork in a timely manner so that this won’t happen to you.
Underwriting
You will have to submit your refinancing application so that your lender can begin the underwriting process. This process is where your lender will verify all the information that you have submitted and checks it all for accuracy. Your lender will also check out the information about your home such as when you bought your home. They will also do a refinance appraisal to see how much your home is worth.
You will also have to know which refinancing option that you will want to do for your home. If the main reason that you are refinancing is to get cash back, you will need to know the value of your home. This will help you to determine how much equity you have in your home and will open refinance options for you. The appraisal process is outlined below in the next paragraph.
Home Appraisal
You will have to have another home appraisal and it will be just like the one that you had to finance your home in the first place. You will have an appraiser visit your home to determine its value. See here to see more about what an appraiser does. To get the best appraisal, you will want to make your home look its best – you will want to make any minor repairs that are necessary and make sure that your home has good curb appeal. You might also want to paint or freshen up your home’s appearance for the appraiser.
You will need to see if the appraisal amount matches the amount of money that you want to borrow or if it is higher. If it is lower, you will need to reapply, and you may not be able to refinance. You might have to bring in extra money to complete the deal. If it is higher or equal to the amount of money you want to borrow, the underwriting process is complete.
Closing on Your New Loan
Once the underwriting and the appraisal are done with your home, the process for closing will begin. You will be sent a document called the Closing Disclosure that will show you the final numbers of your loan. These documents will be given to you in advance of the closing date so that you can go over them. At the closing date, you will be met by the all the people that are on the loan, a representative from the lender, and a representative from the title company, if needed. Your spouse should also be there if their name will be on the loan paperwork.
While at the closing, you will go over all the numbers on your loan paperwork. If everything is agreeable to all parties, you will then sign the paperwork. If you are bringing closing costs to the table, this is when you will pay them. If you are getting money back from your loan, this is when it will be issued. This could be in the form of cash, a bank draft, or a transfer to your debit card. If anything happens after you sign your loan, you will have three days to cancel the loan and give any money back to the lender.
Conclusion
These are just some of the steps that you need to take in order to refinance your loan. You will need to make sure that you have all your paperwork in order before you begin. You will also need to know what appraiser that you want to use if the lender doesn’t provide one. The lender will get all their paperwork together and you will be sent that paperwork to look over before your closing date. At the closing date, you will sign all final papers and get any money that you are owed. If you need to pay any money at the closing date, this is the time that you will need to pay.