Benefits of Refinancing your MortgageThere are many benefits to refinancing your home. There are two types of mortgage refinance transactions you may choose from. The first type of refinance you can choose from is called a rate and term refinance. This type of refinance is when a homeowner is strictly seeking to lower their mortgage payment without obtaining any cash from the transaction. This type of refinance is usually obtained to lower the current interest rate and lower the monthly payment. This can be a great benefit to the homeowner to have a lower mortgage payment.
There are many different options to choose from when considering refinancing. There are many programs to choose from depending on what the homeowner's objective is. The second type of refinance is called a cash out refinance. This type of transaction involves giving cash to the homeowner through the loan from the equity in the home. This type of transaction can also be used to lower the interest rate as well.
The Refinance ProcessThe refinance process will usually involve a lender, the escrow and title companies, an appraisal, a loan officer, and a loan processor. You will need a lender, or mortgage company to lend you the funds for your refinance. The loan officer will initiate the process by speaking with the borrower to determine the type of refinance the borrower would like to obtain.
The processor will then gather all of the necessary documents needed to submit the loan to the lender. The lender will then submit the loan documents to the underwriter who will then analyze all of the documentation and issue a approval or a denial of the the loan.
Loan ApprovalOnce the loan is approved by the underwriter, there will be a list of conditions needed to fund the loan. The most important items needed will be income verification, escrow instructions, a title report, and an appraisal. Income verification documents will determine if the borrower will qualify based on income earned.
This will include calculations of debt from the borrower's additional credit accounts to ensure the borrower can afford the new monthly payment amount. The escrow instructions will come from the escrow company who is in charge of paying off all mortgage liens and other accounts for the borrower.
They will issue escrow instructions advising the lender of what accounts they will be paying. The title report will show all of the current mortgages against the property and will also list the names of the owners. The final document needed will be the appraisal report. This is a report detailing the description of the property and the final value of the property. Once all of these documents have been received and approved, the loan will fund.
Refinancing your property benefits you in so many ways. Whether you are lowering your payment, or getting cash from your property, refinancing your mortgage it is a great idea. There are many mortgage refinance programs to choose from to fit your mortgage refinance needs. You should consider refinancing your mortgage today. You will be happy you did.