Refinance FAQ's

Looking to lower your interest rate, reduce your monthly payments, or consolidate debt? Refinancing may be the option for you!

Find answers to some of the most common questions asked when refinancing.

Many homeowners decide to refinance at some point for various reasons.

It may be a good idea to refinance if the following occur:

  1. Interest rates dop. If you can secure a lower interest rate, you can reduce your interest costs and save money. 
  2. Home value has increased. If the value of your home has increased, you may be able to refinance for more than the balance of your mortgage. With a cash-out refinance, you can free up cash from the equity in your home.
  3. Your credit score has gone up. The higher a borrower’s credit score, the lower the interest rate. If you can refinance using a better credit score, your interest rate may be significantly better.
  4. Mortgage rates are going up. If mortgage rates are going up and you’re in an adjustable-rate mortgage, it may be wise to refinance into a fixed-rate mortgage. This may provide a lower interest rate and peace of mind. 

Depending on the borrower’s goals, refinancing can provide a number of benefits to a homeowner. By refinancing, you have the ability to:

  1. Lower interest rate
  2. Lower monthly payments
  3. Better mortgage terms
  4. Needed cash-out
  5. Remove mortgage insurance

You can still refinance if you have a second mortgage, however, it may be more difficult. If you would like to refinance your original mortgage without refinancing your second, then you need lien subordination. Lien subordination is when property title lien holders place their liens behind junior liens on a property title.

Unless you are refinanacing with a “streamline” product, then the documentation you need for a refinance is pretty similar to what you needed for your original mortgage. You need proof of income, which includes the last 30 days of pay stubs, current tax returns, and tax forms such as W-2s and 1099s. Your homeowners insurance and title insurance is needed. You also need your credit information, any monthly debt payments, and your total assets. Lastly, you will need a current appraisal of your home.

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