If you’re considering refinancing your home, odds are that you have a bunch of questions that you need to have answered before you begin. Maybe you’re wondering when the right time to refinance is, or if it would be wise for your current financial situation. Maybe you know you’re ready to move forward, but you’re not sure what the process looks like.
Lon Alward has been with US Lending for over 30 years and has a lot of wisdom to offer when it comes to refinancing. This should give you a good introduction to the art of refinancing, and prepare you for your initial meeting with an officer when you’re ready to move forward.
What is refinancing?
Refinancing is simply replacing your first mortgage with a new one. Generally people will do this in order to get a lower interest rate, but there are plenty of reasons to refinance. There are also a lot of reasons not to refinance! It all depends on your needs. Just make sure you do your research and know what you’re getting into before you move forward. It’s always helpful to have a lending officer by your side during this process!
Why would I refinance?
While there are a lot of reasons, the biggest motivator for refinancing is typically nailing down a lower interest rate. Maybe your credit has improved from the time you initially took out the mortgage, or the current mortgage rates in your area are just lower than they were before. You can also use the equity that you have invested in your home to help you purchase a boat or car, or give you a financial cushion for family emergencies.
When is it ideal to refinance?
The ideal person looking to refinance is maybe if someone is looking to do an addition on their property, or make a big purchase and you have some equity in your home. You can also refinance if you’re looking for a lower mortgage payment. For instance, if you have seven years left on the duration of your home loan, you may want to refinance to a 30-year-fixed loan, which would significantly lower your mortgage payment.
What is the process like?
The refinancing process will actually feel very familiar to your home buying process. The same boxes have to be checked, and the process will take about the same time (about 30-45 days). You’ll go through the same paperwork, and you’ll probably need an appraisal as well. Basically, we’re saying that you will probably walk through this process feeling like an old pro.
If the refinancing process felt confusing and complicated to you before, we hope that this helped clear the air a little. Refinancing is actually much simpler than it looks, and we love to help people through it. If you’re thinking about refinancing, it’s always a good idea to sit down with a lending officer to help you decide if it’s the right time to move forward.
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* For loan examples and more information visit our disclosure page at https://www.uslendingcompany.com/disclosures/