Frequently Asked Questions about Home Loan Refinancing
It’s normal to have questions about refinancing mortgage. In fact, it’s smart to ask as many questions as necessary so that you can gain a full understanding prior to entering into the process. That’s why we’ve assembled a list of the most frequently asked questions for your convenience.
Should I refinance my mortgage?
The answer to this question really depends on each homeowner’s individual circumstances. Many people find refinancing to be a good option if their current loan has a high interest rate and there is an opportunity to get it lowered. Other borrowers would benefit from refinancing from an adjustable rate loan to a predictable fixed rate mortgage. And still others wish to use the available equity in their homes to consolidate their debt or make home improvements. If you fall into any of these categories, it is best to contact a Cliffco mortgage representative who can advise if it would be a good idea for you to refinance.
What type of savings can I expect from a refinance?
Again, the answer really depends on your situation. If the interest rate you are currently paying is much higher than today’s going rate, then refinancing would probably lower your monthly payment. While other motives for refinancing may save you money over time, they may not immediately result in a lower monthly payment. For more information, consult with a loan expert.
Can I refinance if I have a second mortgage on my home?
Probably. A portion of the proceeds from your refinance would typically be used to pay off the balances of both of your existing loans, thereby consolidating two loans into one monthly payment. However, if you do not wish to pay off your second mortgage, you may be able to have that lender sign a subordination agreement to keep it in second position as long as you are willing to pay any necessary fees associated with this process.
What if my property value is less than what I owe?
In some cases, the home value is less than the outstanding balance of the mortgage. This can be tricky, but it is often possible to refinance. A mortgage expert can review your options with you.
How much does it cost to refinance?
There is no flat fee for refinancing. Each lender’s fees vary however there are some fees that are standard, such as credit report, title, escrow, notary, and recording fees. Additional costs include appraisal, processing, and underwriting fees. You will also be required to pre-pay a portion of your property taxes, homeowner’s insurance and mortgage interest. Also keep in mind there will be additional costs involved if you are paying points to lower the rate. Fees may be rolled into the new loan if there is enough equity available in the home.
What information will I need to provide?
Most lenders will need you to produce your most recent pay stubs and W-2s in order to prove your income. In addition, be prepared to submit your most recent mortgage statement and the declarations page of your homeowner’s insurance policy. You’ll also be asked for recent bank statements, 401(k) and/or mutual fund and stock statements.
What if my credit isn’t good?How long will it take?
In most cases, refinance transactions take between 30-60 days from the date of application to close. The smooth and seamless process coupled with proprietary paperless technology offered by Cliffco Mortgage Bankers enables us to close loans faster than the average industry turn-times. As long as you do your part in delivering the documentation that we need in a timely manner, we should be able to close your loan within 30 days.
What can I expect at closing?
Depending on the regulations of your state and process of your lender, your closing will either take place in your home, at your attorney’s office, or at an escrow office. You will be presented with all of your loan documents along with a brief explanation of each, at which time you will sign the documents in front of witnesses. You may be required to provide a certified or cashier’s check to pay your closing fees. If you are doing a cash-out refinance, you will receive your funds within one to three days of closing.
To find out more information about refinancing a mortgage contact Cliffco Mortgage at (516) 408-7300 today.