How to Refinance Your Home Loan | Follow These Five Steps:
Refinancing a mortgage could be a great option for you if you plan to change jobs, borrow money for home improvement, or want a lower interest rate. Here are steps you can follow when switching to a new lender.
1. Know the Expected Total Cost of Your Refinance
Refinancing could potentially save you thousands of dollars. Make sure to calculate all the fees involved to see if you could save more money through refinancing or changing mortgage lenders. Ask yourself, “Are there early exit fees and fixed rate break costs?” “How much will it cost to establish a loan?”
2. Decide on the Best Loan
Interest rates for home loans are at a record low right now. However, before you take advantage of it, make sure you get the best deal on the market. Examine your purpose for applying for a refinance to narrow down your choices.
If you want predictable monthly payments, consider a fixed rate home loan. If you are after flexible payment options and features, consider a variable rate home loan.
3. Get the Necessary Documentation Together
Avoid unnecessary processing delays by preparing all the documents required by your new lender. Some of these basic documents are proof of income (late payslips, dividend statement, and income tax documents), expenses, and proof of identity (Social Security number and phone number).
Refinancing a loan can be stressful. The good thing is home loan specialists, like the ones provided by Freedom Lend, are available to walk you through the entire process.
4. Evaluation of Your Refinancing Application
The loan refinance process is generally very simple, but a few problems could still pop out. For instance, your bank would most likely perform an independent valuation of your property and run a credit check on you. Thus, it is important for you to think realistically of how much you should really borrow, as well as your property’s true value.
5. Remaining Steps to Loan Refinancing
Once approved, your new lender will ask you to complete and return some contracts. They may also get hold of your former lender to settle your previous mortgage in order to take custody of your Certificate of Title.
Refinancing a home loan is a great option for you whether you want to access a lower interest rate, more flexible loan features, or merge your existing debts. Talk to a qualified financial specialist to get advice that fits your unique needs and goals