Refinance Process
Refinancing can be one of the most powerful financial tools a homeowner can use to save money and increase financial stability. Of course, the goal for most homeowners is to lower loan payments, consolidate debt or access equity for extra cash. The questions that most homeowners should ask are:
- "When does refinancing make sense for me?"
- "Should I payoff all my debt?"
- "How much money can I save?"
- "What is Equity Reallocation?"
- "Is it better to have no points and a higher rate, or a lower rate and pay points?"
These and other questions can be answered very quickly by providing a few basic items of information about you, your mortgage and your financial goals. Connecting with a Loan Specialist at Town Financial is your first step. We can guide you through the maze of options that are unique to each and every borrower, regardless of the circumstances. Remember, refinancing is more about financial sensibility and creating options than just getting a different rate. Connect with us today and we'll share the information and strategies you may be missing.
Things to avoid during the refinance process.
Many homeowners make the mistake of applying for new credit, depleting their cash reserves or rushing out to buy things as soon as the lender pre-approves their loan. But there are still a few major hurdles to overcome before their loan can close. Here are some things to avoid during the loan process to assure your transaction goes as smoothly as possible:
- Don't make an expensive purchase or apply for new credit! It may be tempting to order that new sofa for your living room, but its best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the closing. Financing that furniture with a store credit card or even one of your own credit cards could jeopardize your credit worthiness (score) during the time it means the most. Using cash to purchase big items can also create a problem because many lenders take into consideration your cash reserve when approving your mortgage.
- Don't get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application progress.
- Don't switch banks or move money around. As we review your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds.
- Don't disregard the refinance loan requirements. In order to process your loan, you need to meet certain requirements, just like you did on your purchase loan. We may need copies of your bank statements, W2's and other paperwork. The lack of current financial information, if your loan requires it, could cause you to delay your loan and the financing you need.
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