Home Loan Refinance: What to Know
With home values soaring, 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.
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 may be for you. Cash-Out Refinance 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. |
A cash-out refinance is typically a good option for people who are looking to do an improvement project on their home or looking to consolidate debt, but the rate might be a little higher than a traditional refinance.
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?
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. Every situation is different. PPF will work to get you the best loan for your current needs.
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)