Refinancing a home is a process, one that typically takes a few months to complete. This is because there is a lot involved in this process and a lot that has to be sifted through before the final paperwork can be signed. As a homeowner you may be asking yourself ‘how can I refinance my house without all the headache?’ The short answer is that it is a process and you will have to do a bit of leg work, but there are a few things you can do to make the process a little more smooth for you. With the right preparation you refinance can go off without a hitch.
Another great resource for refinances is using the FHA Streamline Program
What Should I Do Before I Refinance My House?
Refinancing a house actually starts long before the bank has even been contacted. In order to get a good deal on a refinance you need to prepare beforehand so you know exactly what you are dealing with in terms of your own finances. This preparation also enables you to look at the possible options in front of you and determine whether they will work for you or not.
Before you contact any lenders you’ll want to determine your credit score and see if there are any areas where you can improve it. As with any major purpose, the better your score is the better your chances are of getting good terms. While you’re sewing things up with your credit, you’ll want to tie up loose ends with your finances as well. This means you’ll need to determine what you owe on the house and any liens or lines of credit on the home. You’ll also need to put together clear documentation for all of your assets and expenses so you can have these for your loan officer when he needs them. This information is necessary for your lender before he will approve a loan. In addition to this, any major purchases that you need to make will have to be made prior to the refinance or after the refinance because you don’t want that hit on your credit when you approach your lender.
Working With Your Loan Officer and Lender
When you have done the legwork and tell yourself that it’s ‘time to refinance my house‘ your next step is going to be to contact multiple lenders. It’s always a good idea to get multiple quotes so you can compare them to determine what’s best for you. In addition to the comparing, you can often take the quotes back to your original lender and negotiate a better deal. Never settle when refinancing. During this time you’ll also need to make sure your team has all of the information they need. Those documents you prepared prior to approaching the lender, such as the assets and expenses and any information regarding liens should be shared with the professionals. They will know what can and can’t be done for you when looking at your particular financial situation.
When you decide you want a specific lender to ‘refinance my house’ there are a few things you need to remember regarding the loan. First, this move is supposed to give you a boost financially so make sure you are getting a good financial benefit from it. Lower interest rates, improved monthly mortgages, lower APR’s, and even reduced loan terms are all good reasons to refinance, as long as they are saving you money. You never want to refinance into a loan that is going to cost you more in the long run than you would have saved. So do your legwork here as well and crunch some numbers, then crunch some more. Using a refinance calculator to go over all of the terms of the loan and see where you’ll be saving money and where you’ll be losing money. Once you’ve signed the loan you can’t retract the signature so make sure that the loan you are agreeing to is a smart financial move. The refinance calculators are a great source for determining whether or not the refinance is the right choice.
As with any major financial decision, it is recommended that you work closely with professionals. You can and should do plenty of legwork beforehand and during, but ultimately a good expert on your side may be your key to getting the best deal. Prepare beforehand as much as you are able then let the professional work with you on the rest. In the end you’ll more than likely wind up with a refinance that suits your specific needs.