What Is Involved In Refinancing Your Home

What Is Involved In Refinancing Your Home, Owning your own home is a major part of the American dream—a dream that you worked hard to achieve. When you bought your home, you probably assumed that the payments you agreed to make under the terms of your mortgage would continue for the duration of the loan. Now,what is involved in refinancing your home?

When you do mortgage  refinance, you pay off an existing mortgage and take out a new one. An important factor in deciding if you should refinance your mortgage is understanding just what’s involved in the process, the costs and fees you’ll have to pay, and how long it will take you to recover those costs.

When you refinance, you generally will repeat many of the same steps,provide the same information, and encounter the same types of costs that were involved the first time around. The lender’s decision whether to approve your loan application will be determined by an
evaluation of:
Your financial situation and credit history (since this helps the lender assess your ability and willingness to repay the debt).
Property value (based on current market value and how much your home is worth).
The amount of equity in your home (the difference between the fair market value of your home and the amount you still owe on your mortgage).

Information the lender will need
About you  Because refinancing involves applying for a new mortgage loan, the lender will likely need verification of your employment and income; information about your debts and assets; and the account numbers and balances for your savings, checking, and other accounts.

About your present mortgage The lender will require information about your present mortgage, including your current monthly payments, the outstanding mortgage balance, current status of your property tax and insurance payments, your lender’s name and address (if you are not applying to refinance through your present lender), and the loan number. The lender also may investigate your payment history to determine that your mortgage payments are made on time.

The lender may order a title search to verify that you own the property. As part of determining your ownership, the lender also may require a copy of a site survey. A copy of the survey completed when you first bought your home may be acceptable.

Finally, the lender will need to know what your house is worth. The lender may require an appraisal of the property. In some cases,an exterior-only appraisal is all that will be required.

Costs involved in refinancing and No- or low-cost refinance we will introduce to you on the next text.