How To Refinance Mortgage
If interest rates are lower than the existing rate you have on your home, you should find out how to refinance a mortgage. Contact your existing mortgage lender, and find out what they need to process your refinance request. Since they already approved you for a mortgage, using them as the source may be the simplest way to handle the refinance.
- Complete your mortgage loan application, and submit it to your lender for approval. They will run a credit check, verify your employment, and hire an appraiser to determine the current market value of your home. A refinance mortgage may be difficulty to get if your equity in the home is insufficient.
- If you are approved, you must decide on the type of loan you want. If you only intend on staying in your home a few more years, you may want to consider an adjustable rate mortgage, or ARM. Find out what the ARM rate is for the number of years you are going to stay in your home. If the rate is lower than the fixed mortgage rate your lender has available, you may want to choose the ARM instead.
- If you are using a cash-out refinance mortgage, find out the new payment. You do not want to overextend yourself, so be sure you are comfortable with the new payment. If you think the payment is too high, consider taking a little less cash out on the loan.
- If your lender does not approve your request, shop around. There are many lenders who will refinance an existing mortgage, if you qualify under their loan guidelines. Search online for lenders, or visit some institutions in your area. If you find one that is willing to work with you, do not sign the loan documents until you are comfortable with the terms of repayment. Even though interest rates may be lower, you do not want the closing costs and lender fees to be overly intrusive or the refinance may not be worth doing.