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The BrightPath Guide to Refinancing Your Home

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Want to reduce your interest rate? Trying to pay off your home faster? Need more time on your home loan? If you've answered "yes" to any of those questions, it's time to think about refinancing your home. The process involves several steps, but here's an overview so you know what to expect.

 

 

Preparing to Refinance

 

If you're interested in refinancing your home, the first step is to decide why you want to refinance. Whether you want to lower your payment, get more time to pay, take out some equity, or refinance for another reason, that helps you determine the type of loan you need.

 

 

Researching Options for Refinancing Your Home

 

Once you narrow in on your main objective, it's time to start looking at different options. For instance, if you want to get a lower interest rate, you may want to switch from a conventional mortgage to an FHA loan or a VA loan if you’re a veteran. Similarly, if you want to take out some of your equity, you may need to refinance your whole home, or you may be fine with just taking out a home equity line of credit.

 

Applying to Refinance Your Mortgage

 

Now that you know which type of loan you want, you can start applying. There are a huge range of lenders on the market place, and to ensure you get the best mortgage for your needs, you should apply with a lender who offers a variety of different types of mortgages.

 

Getting the Appraisal

Before approving your loan, most lenders are going to require you to get an appraisal. Basically, this means that someone is going to look at your home and assess its value. Typically, you have to pay for this process, and it generally costs between $200 and $500. The appraisal can directly impact the type of loan you get as well as its value, so it's important to take this step seriously.

 

Closing on the Mortgage

When refinancing your home, you have to close just as you do when you buy a new home. This is a short meeting where you double check that the paperwork is correct, and you sign all the loan documents. You may also have to pay closing costs at this time. To be on the safe side, many borrowers bring their lawyer or a broker to help them with this process, and some states require a witness to be present. Your lender can fill you in on the specifics.

 

Staying on Top of Your Mortgage

After you complete refinancing your home, you have to make sure you stay on top of your payments. If you want to pay off the mortgage sooner, you may want to make extra payments. Additionally, if you cashed in on any of your home's equity, you also have to ensure that you have a plan for those funds and that you use them accordingly.

 

Ready to learn more about refinancing your home? Contact us today. At BrightPath, we help everyone from first time home buyers to existing home owners who want to refinance. Let us help you.

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