Refinancing your home can help you save money and get a better deal on your mortgage. Many homeowners, however, are somewhat intimidated by the process. While it can be long, the process of refinancing your home doesn’t have to be difficult. Getting the support of professionals, such as a title company, can help you navigate it with ease. This step-by-step guide can help you understand what to expect and where to turn for guidance.
Initial Preparation
Before you apply for a refinanced mortgage, check your credit report and score to find and address any inaccuracies or other errors. These mistakes can impact your score and your ability to get a new loan. Be sure to dispute the report well in advance of beginning the application process, as most lenders will be hesitant to move forward if you have an ongoing dispute. After reviewing your credit score, collect the necessary documents. These include paystubs, tax returns, W2s, bank and mortgage statements, homeowners’ insurance declarations, and any paperwork related to a divorce, bankruptcy, new credit application, or significant credit issues.
Choosing a Loan
After collecting your paperwork, you can begin shopping for a refinance loan. Consider why you’re choosing to refinance your home and how long you expect to own the property as you search. Take the time to understand the different loan products available, and think about how much risk you’re willing to take in terms of rate and payment adjustments with the new loan. By making an effort to do careful research and analyze your own needs and decisions, you can increase your chances of finding a loan that’s right for you.
Applying for the Loan
Next, you can begin applying for your loan. Confirm that your loan agent has everything they need to review the application, and ensure that the application is filled out accurately and completely. Small mistakes can delay the loan process and make it difficult for you to reapply later if the application is denied. The information used in your application should match the information on your other documents exactly.
Ordering an Appraisal
Before the loan application can be approved, the Lender will order a full appraisal of your home. The appraisal establishes your property’s value and whether you have enough equity to support the loan. Appraisals typically cost around $400-$600. You should present your home in the best manner possible so that the appraiser leaves with a favorable impression of your home. This means that the home should be cleaned and organized and that any minor fixes and home improvement projects should be completed by the time the appraiser arrives for the inspection.
Underwriting Review
During this stage, an underwriter will examine the application and documents provided to ensure that you will be able to make the necessary payments on the loan. A title company can be a helpful resource during the underwriting stage. The company can function as a communication liaison to resolve title or application concerns or conduct additional title research to ensure that no changes have occurred since the original mortgage was issued, which can increase your chances of successfully receiving the loan.
Reviewing Conditions and Interest Rates
After your application is approved, review your conditions and provide any additional information requested. Ensure that the terms match your expectations and that you will be able to meet those of the underwriter. Your loan agent will then help you lock in your refinanced mortgage rate, which protects you from increasing rates for between seven and 60 days as you finalize the loan. Longer lock periods typically cost more at closing. Consider how much additional time you’ll need to collect and review documents before agreeing to a lock period.
Final Documents and Closing
Finally, the closing process can begin. Order the necessary loan documents and a preliminary closing statement that outlines final costs and terms, and keep an eye out for anything unexpected. Your loan agent will help you resolve any discrepancies. You can then sign your loan documents and close the process. If this is your principal residence, you have a three-day right of rescission period, during which they can back out of the loan. After that period, you will receive an official closing statement and a new mortgage document to be recorded. Keep copies of all of the documents provided for your records.
Working with a Title Company
Mathis Title Company can assist you throughout the refinancing process. The company can assist with communications, title insurance, negotiating mortgage terms, and closing processes to help you receive the ideal loan for your needs. Mathis Title can also assist with mechanics liens, settlements, and contract preparation and review. Its founder, Robin Mathis, has decades of experience in both real estate and law, providing her with a unique perspective and in-depth knowledge informed by her expertise in both fields to support her clients. For more information, contact Mathis Title Company at 703-865-7880.
