Refinancing made easy
By Melissa Wirkus
Refinancing an existing mortgage
can be just as stressful as taking out your first
one, but it does not have to be.
People refinance for a variety of reasons, but mainly
to get a lower overall monthly payment and interest
rate, or to get cash out.
Although if you are applying for a refinance, you
have already been through the mortgage process once,
it can still be very overwhelming and stressful.
If you follow some easy steps and tips, you should
be able to go through the refinancing process without
a care in the world.
An article posted on Bankrate.com by Holden Lewis,
“Four steps to a stress-free refi,” gives
some helpful tips on the refinancing process.
The article explains four things to make refinancing
easier on yourself: Know why you want to refi, provide
paperwork promptly, lock long and keep in touch, but
not too much.
“The first step, figuring out exactly why you
want to refinance, is key. ‘Because rates are
low' isn't the sole reason to refinance,’ Vella
says. Getting a home
loan is like buying a vehicle: You have many choices,
and only some of them are right for you. When you
go to an auto dealer, the salesperson wants to know
whether you want to haul stuff, have fast 'n' furious
fun, or feel like a master of your domain. Depending
on your priorities, the salesperson might recommend
a sedan, pickup truck, sports car or sport-utility
vehicle.”
When you go to pick out a car, you will usually have
a list of reasons of what you are looking for, and
the same goes for a refinance. As stated before, there
are a variety of reasons that a person may want to
refinance, some other reasons include paying off the
loan quicker, or bragging rights to your friends and
neighbors. Whatever your reasons may be, make sure
you tell your lender first and foremost.
As you already know, any sort of mortgage transaction
requires a lot of paperwork, and refinances
are no different. Ask your lender in advance what
sort of paperwork and documentation you are going
to need, and get it ready now.
Also, always remember to lock-in your interest rate.
It is important that you get the interest rate amount
and extension of the lock in writing to avoid any
confusion in the end.
“Many lenders are telling refi customers that
their loans will take up to 60 days to close. Other
lenders stretch their estimate to 90 days. If you
want to lock at today's low rates, make sure the lock
extends at least up to the lender's estimate of how
long it will take to close the loan.”
After you have done the following steps, your new
loan is probably well underway. This is probably a
time when you start to wonder about the status of
the loan, but be sure not to bother your lender everyday!
“Ask for a timeline of the loan -- a document
that spells out when each step is expected to be completed.
‘It relieves stress on the part of the borrower,’
Vella says. Getting a timeline from the lender might
not get your loan closed before your next-door neighbors
who applied on the same day, but it helps you understand
what's taking so long -- and that can be the difference
between a stressful and a stress-free refi.”