FAQS

Look at your specific situation and your motivation for refinancing. The most common reasons to refinance are to reduce your rate and/or payment, convert from an adjustable to a fixed rate, or pull cash out of your equity to consolidate debt or improve your home. If your objective is to reduce your rate and payment, you should review your current interest rate and see how much you can save. If you are converting your adjustable rate into a fixed rate, you may see an increase in your rate and payment, but you’ll get peace of mind knowing your rate will never increase again. If you are using the equity in your home to consolidate debt, your overall loan balance and payment may go up, but you will save monthly because you will eliminate the monthly obligations that you are paying off. Your Mortgage Loan Originator can help you determine whether refinancing makes sense for you.

It depends on what your current interest rate is and what your motivation is for refinancing. If your current rate is higher than what is available in the market, it probably makes sense to refinance. To get an idea of what you could save by refinancing, call one of our Mortgage Loan Originators for some expert advice.

Typically, a second mortgage is paid off through the refinance. We will consolidate both loans into one new first mortgage and you will only have one payment each month. If you’d prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance the first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.

Fees associated with refinancing vary from lender to lender but there are standard fees that are typical across the board. These fees include document preparation and third party fees such as credit report, title, escrow, notary, and recording fees. Other fees include the appraisal fee and lender fees such as processing and underwriting. If you are paying points to lower the rate, the cost of each point that you pay equals 1% of your new loan amount. Aside from the closing fees, there will be prorated pre-paid costs for items such as property taxes, interest, and homeowner’s insurance. If you have enough equity in your home, you can add all fees and pre-paid items into your new loan.

Standard documentation collected for a refinance transaction includes information regarding your income such as paystubs covering the most recent 30 days and W-2s for the last two years, tax returns, asset information such as bank or mutual fund/stock statements covering the last 60 days and current loan information such as your most recent mortgage statement and homeowner’s insurance declarations page.

Depending on the reasons why your credit is imperfect, there are great loan options available including our government programs. Call and speak with one of our expert Mortgage Loan Originators to determine whether you qualify for one of our programs.

There is no rule-of-thumb when it comes to refinancing because there are different reasons to refinance. If you are currently in an adjustable rate looking to get into a long-term fixed loan, your rate and payment may increase, but you will be in a better long-term situation knowing your rate and payment will not change. If you are looking to consolidate debt, your loan amount and mortgage payments may go up, but your overall monthly outflow will decrease because you will have eliminated some or all of your credit card bills and other monthly obligations. There are also no- and low-cost refinance options that can lower your rate and payment with no or minimal investment. It is a good idea to go over your specific situation with a Mortgage Loan Originator to determine whether refinancing makes sense or not.