What Exactly is Refinancing?
We bet you’ve heard of refinancing, but have you ever looked into what the process entails? You can actually refi your home, your car, or just about any other debt you might have. It’s important to understand the refinancing process and evaluate if it’s right for you.
Refinancing for the right reasons at the right time can be hugely beneficial for you as a homeowner. It can provide a much-needed influx of cash at a low-interest rate or keep more money in your pocket over the life of your loan. While the positives are plenty, there are things to consider before refinancing your home’s mortgage.
How Refi’s Work
The benefit of refinancing is to result in better terms that would improve your finances. That’s it — that’s the whole point! For example, as a homeowner, you could take advantage of a new, lower interest rate to reduce your monthly mortgage payments and the length of the loan from 30 years to 15 years if such terms were available and a benefit to you.
Once your refi is approved and processed, this new loan completely pays off and replaces your old loan. You would then make payments on the new loan until you pay it off or refinance again in the future.
So, be prepared for a similar process as you went through when getting your original mortgage. Your credit score and debt-to-income ratio are still very important, and you’ll complete many of the same forms and pay a number of the same costs again.
How Do You Refi?
Well, there’s the aforementioned forms. Applications require a lot of information and documents. The exact amount needed will vary by applicant, but at Minute Mortgage, we won’t make you send us anything we don’t truly need. Submitting documents is easy, whether you apply via our website or app. Just snap a pic and submit. We make it easy like that.
Also, be sure to not take on any new debt during the refi process; doing so could hinder or halt the deal. Carefully review the new loan terms and all associated fees before signing on the dotted line so you know what to expect financially when it’s time to make your new payment schedule.
Refi Next Steps
The information here is just a few simple highlights of the mortgage refi process. Be sure to ask your tax attorney about how refinancing may help your financial situation. In the end, it’s all about the feelings: We’d love to have you here, yet we encourage you to shop around to find a qualified lender offering the best terms that best suits your circumstances.
Whether you lower the interest rate on your loan, extend the time you’ll take to repay it, or both, your new loan payment will most likely be smaller than your original loan — and that’s a good deal.
If you have questions about any of the points here, we encourage you to reach out to our team of experienced loan experts.