How to Refinance Your Mortgage
The home refinance process can be less complicated than the home buying process. It can be hard to put a set timeline to the process, but refinancing your home typically takes 30 to 45 days. Understanding the step-by-step process, you will undergo is important to refinancing your home as a financial tool.
Applying
The first step is to review the types of refinance to find the option that works best for you. Your Voyage FCU LenderWhen applying to refinance your home will ask for specific items needed. Our Lenders will look at your income, assets, debt, and credit score to determine whether you meet the requirements to refinance and can pay back the loan.
Some of the documents your lender might ask for you to include:
Two most recent pay stubs
Two most recent W-2s
Two most recent bank statements
Two years tax returns if self-employed or if commission income is received that is 25% or more of income
Homeowners insurance declarations page
Copy of Drivers License
Current mortgage statement
Locking in Your Interest Rate
After you are approved, you may be given the option to lock your interest rate, so it doesn’t change before the loan closes.
Rate locks last anywhere from 15 to 60 days. If your loan doesn’t close before the lock period ends, you may be able to extend the rate lock, but it will typically cost you money.
You might be given the option to float your rate, which means not locking before the loan closes. This may allow you to land a lower interest rate, but it could put you at risk of getting a higher rate. If you’re happy with the rates at the time you’re applying, it is generally a good idea to go ahead and lock your rate.
Underwriting
Once you submit your application, your lender begins the underwriting process. During underwriting, your Voyage FCU lender verifies your financial information to make sure everything that has been submitted is accurate. This is also the time where if any additional information is needed, your lender will request those items from you.
Home Appraisal
A home appraisal will be required to refinance your home. Your lender will order the appraisal from a certified appraiser. The appraiser will make an appointment with you to visit your property to complete the appraisal report. Once your Voyage FCU lender receives the appraisal, you will receive a copy for your records and will have an up-to-date estimate of your home’s value. To ensure that it meets the appraisal guidelines the appraisal is also reviewed .
To prepare for your appraisal, you will want to make sure your home looks its best. Tidy up and complete any minor repairs to leave a good impression. It can also help to put together a list of upgrades you’ve made to the home since you’ve owned it. If your home’s value is sufficient for the loan amount you want to refinance and the appraisal meets underwriting guidelines, then the underwriting step is complete, and you can move on to finalizing the refinance details and scheduling a closing.
If the appraised value comes back low, you can choose to decrease the loan amount, or you can cancel your application. However, if you choose to cancel your application, you may still be liable to pay the appraisal fee. An appraisal fee is the payment made to an appraiser to estimate the value of your property. The cost of the appraisal was disclosed on the loan estimate when you applied for the mortgage refinance.
Closing On Your New Loan
Once the underwriting and home appraisal steps are complete, it’s time to close your loan. At least three business days before closing, your Voyage FCU lender will send you a document called a Closing Disclosure. This document is where you’ll find all the final information for your loan.
At closing, you’ll go over the details of the loan and sign your loan documents. Once you’ve closed on your refinance, there is a three-business day wait period before the refinance loan is funded.
Refinancing your home can save you money by finding lower interest rates or can be a good option to take cash out for home improvements. When interest rates fall, take advantage of the better market. Contact Voyage FCU, to get in contact with one of our lenders and they will help you navigate through your options.
