Home Loan Refinance: What to Know
With mortgage rates at historic lows you might be thinking about refinancing your mortgage for a lower payment, shorter loan term, or using your home’s equity to complete a home improvement project. Not a bad idea. Before getting started, here are a few pointers to help with your decision.
We talked with Blaze Holbert the head of Primary Partners Financial, our mortgage lending partner, to get his best advice for considering a refinance.
What's a mortgage refinance?
Refinancing your mortgage means that you’re paying off your current mortgage loan for a new mortgage loan on the same home. With a mortgage refinance, you have a couple options to consider.
If you’re looking to lower your monthly mortgage payment or reduce the length of time you're making a mortgage payment, a traditional mortgage refinance is for you.
A cash-out refinance will payoff your current mortgage and let you take cash out against the equity in your home. The end result will be a higher mortgaged amount on your new loan, but if the rate is lower than your original mortgage, your overall payment could still be less.
According to Holbert, “A cash-out refinance is a good option for people who are looking to do an improvement project on their home or looking to consolidate debt. The rate might be a little higher than a traditional refinance but it is still historically low.”
These are just a few options. It’s best to work with a mortgage professional to make sure you're getting the refinance loan that meets your needs.
Arrowhead has partnered with the team over at Primary Partners Financial who can answer all of your questions, and find just the right fit for you.
Is now the right time to refinance?
“Yes!” says Holbert. “Rates haven’t ever been this low. With low-to-no closing cost options, most people should be looking to lock in their mortgage at these rates. Even if you refinanced within the last 6 months, you might still be able to save.”
As a general guideline, if you have 20% or more equity in your home, it’s a great time to consider a refinance.
Meeting with a mortgage professional, like the team at Primary Partners Financial, is the best way to know if it’s the right time for you to refinance your mortgage. “Everyone’s situation is different. It’s like a fingerprint. My team will work to get you the best loan for your situation. We pride ourselves on a fair and transparent process. If you’re getting a better deal else where, we’ll let you know,” says Holbert.
Pro-Tip: Refinancing is very popular right now, and the process can take 45 days, so get started soon!
How do I begin the process?
1) The first step is to gather information about your current mortgage.
Your monthly mortgage statement will include information like your loan balance, term, and interest rate
2) Contact a mortgage professional.
They’ll gather specifics on your goal for refinancing and walk you through every step of the refinance process. In preparation of your consultation, you’ll want to have a few items ready.
- Pay stub(s) - 1 full month
- W-2 forms - last 2 years (If self employed, your tax returns - last two years)
- Bank statements - last 2 months (all pages)
- Assets (stocks, bonds, 401k, IRA, etc.) - last quarterly statement
- Copy of driver's license
- Copy of social security card
- Mortgage statements - all open mortgages
- Home insurance policy information
- Home Owners Association information (if applicable)