Want to reduce your interest rate? Trying to pay off your home faster? Need more time on your home loan? If you’ve answered “yes” to any of those questions, it’s time to think about refinancing your home. The process involves several steps, but here’s an overview so you know what to expect.
If you’re interested in refinancing your home, the first step is to decide why you want to refinance. Whether you want to lower your payment, get more time to pay, take out some equity, or refinance for another reason, that helps you determine the type of loan you need.
Once you narrow in on your main objective, it’s time to start looking at different options. BrightPath offers a variety of options depending upon your ultimate home ownership goals, whether that’s to lower your interest rate, pay your home off faster, or leverage the equity in your home for other financial goals.
- Cash Out Refinance Loan – Use the equity in your home to get cash.
- Student Loan Cash Out Refinance – Use the equity in your home to pay off student loans.
- FHA Streamline – Restructure your FHA loan terms.
- HARP – Get a lower interest rate.
- 25 Year Mortgage – Pay off your mortgage sooner.
Now that you know which type of loan you want, you can start applying. There are a huge range of lenders on the market place, and to ensure you get the best mortgage for your needs, you should apply with a lender who offers a variety of different types of mortgages.
Before approving your loan, most lenders are going to require you to get an appraisal. Basically, this means that someone is going to look at your home and assess its value. Typically, you have to pay for this process, and it generally costs between $200 and $500. The appraisal can directly impact the type of loan you get as well as its value, so it’s important to take this step seriously.
When refinancing your home, you have to close just as you do when you buy a new home. This is a short meeting where you double check that the paperwork is correct, and you sign all the loan documents. You may also have to pay closing costs at this time. To be on the safe side, many borrowers bring their lawyer or a broker to help them with this process, and some states require a witness to be present. Your lender can fill you in on the specifics.
After you complete refinancing your home, you have to make sure you stay on top of your payments. If you want to pay off the mortgage sooner, you may want to make extra payments. Additionally, if you cashed in on any of your home’s equity, you also have to ensure that you have a plan for those funds and that you use them accordingly.
Ready to learn more about refinancing your home? Contact us today.