Things to Know When Refinancing
Refinancing: The process of replacing an existing loan with a new one. When homeowners refinance, they repeat the mortgage process they completed when they first purchased their home, but instead of buying a new home, they get a new loan. If you’re a homeowner considering refinancing, below are key tips to consider.
When refinancing, your new loan can come with financial incentives, including lowered interest rates, lower payments, and home equity access. If you’re looking into refinancing your home, first decide which options best help your circumstance. Consider the following questions:
- What will the repayment period look like? Would a longer or slower mortgage term work best for me?
- Will taking on lowered interest rates reduce overall interest costs?
- Which refinancing options are best for me to build home equity?
- What are my cash-out refinancing options? Will they help me pay for other life expenses?
- Do I want to remove someone else’s name from the loan through refinancing?
- Do I have real estate taxes or homeowners insurance I want to pay off? Will refinancing help with those payments?
What Will the Refinancing Process Look Like?
After you’ve analyzed your refinancing options, you’ll find that the next steps in the process are similar to when you first bought your home, minus the real estate agent and down payment costs. In fact, because there’s less paperwork and people involved, the refinancing process may seem even easier than your home buying process.
First, you’ll fill out an application that requires the same information you provided when buying your home, which may include income, employment, and credit score verification. From there, your refinance closing may take from 2-4 weeks. Along the way, you may need to fill out additional information, depending on the needs of your lender. You should also expect to pay some closing costs at closing, unless you decide to have such costs rolled into your new loan amount.
What Help Is Available?
Even if you are familiar with financing a home, how long your refinance takes depends on the experience and efficiency of your lender. For over 25 years, the professionals at Butler Mortgage have been helping Central Florida homeowners through the homebuying and home refinancing process by matching them with affordable loans at desirable rates. Let us help you take the first steps towards refinancing your home by calling 407-931-3800 or by filling out our free consultation form online.