Best Way to Refinance?
When making the decision to refinance, consider all your options and pick a plan that will help you meet your financial goals.
What Types of Loans are Available?
- Fixed-rate mortgages apply the same interest rate for the life of the loan, making monthly mortgage payments more predictable
- Adjustable-rate mortgages have interest rates that adjust to the movements of the market index.
- Cash-out refinance mortgages allow you to turn a portion of your home's equity into cash to use however you like: paying off credit cards, medical bills, remodeling, education, etc.
- A renovation refinance can help you modernize or repair your home. The costs of renovations would be rolled into your current mortgage, so you would still only have one loan and one monthly payment.
Which Loan Term is Right for Me?
Repayment schedules can vary greatly. Fifteen to 30 years are the most commonly found repayment schedules, with the 15-year mortgages typically offering lower interest rates than those found with 30-year mortgages. Likewise, you would pay substantially less in total interest if you were to stay with the 15-year mortgage through the life of the loan.
How Does Closing a Refinance Work?
Similar to a regular purchase loan, you'll have several documents to sign at closing for your refinance. Your former mortgage will be closed out, and you will start the new loan structure established in your refinance agreement.
How Do You Prepare for Closing?
As your closing date approaches, you’ll want to be sure to stay in good contact with your loan officer. Although you’ve gone through the closing process before, you want to make sure the refinance process goes smoothly. Being prepared will always pay off in the end.
Here's what you'll need:
- Documents – Verify that you have the documentation needed to move forward into closing.
- Credit – Review your credit history. To make sure you have good credit standing, refresh yourself on how your credit score is derived and also on ways to keep your credit clean.
- Insurance – Confirm that your insurance policies provide appropriate coverage for your home's value and contents. Also, double-check that the policy reflects the name of your refinance lender as the payee for losses.
- Rate – Consult with your PrimeLending loan officer about locking in your interest rate before you close. Locking a rate before you close will provide protection for you if rates should rise before your closing date.
- Escrow – Examine your current loan's escrow account and determine if a surplus or deficiency of funds exists.
- Closing Costs – Arrange to bring to your closing appointment a cashier’s check made out for the exact amount you'll need. Watch this video to help you understand.
Want to learn more about a mortgage refinance? Check out this quick video for additional insight. You can also discover more about how simple the process is with Loanplicity®, our best-in-class digital mortgage experience.