Refinancing is needed when you need more loan or make any alterations in your monthly mortgage payments for your existing loans. Some buyers are not happy with the interest rates they are paying currently and hence tend to go for refinancing. Whatever the case may be, you should be able to change your finance requirement with your lenders. Make sure to take advantage of the lower interest rates through refinancing.
Here are some useful tips that can help you in mortgage refinancing:
Make sure you prepare all the necessary paperwork and decide when you need to apply for refinancing. You may again need to provide your pay stubs, W2, tax returns and bank statements as this is totally a new process of loan approval and sanctioning.
Interest rates keep fluctuating every day depending upon the market conditions. Hence make sure to lock your rate and prepare the necessary documents for your lender’s review in a day or two. Assure that the underwriter is satisfied with all your documents and has no hurdles stopping from sanctioning your refinancing. Try to schedule the appraisal as early as possible once the rate is fixed.
Lenders may skip to inform you certain things. But it is your responsibility to get the information from them and also inform them of what is happening and involve them whenever you need to. Underwriters may need additional paperwork before they sanction your refinance loan. Hence be prepared and keep alert. Keep communicating with them regularly until you get the final loan approval. Make sure things are moving as expected and there are no delays because of you.
You can check your refinance progress even during the waiting period. It is always reasonable to check and follow up once or twice a week.
You as a borrower need to ask your lenders about the time frame when you can anticipate the the refinance decision. Normally, every lender has a 30 day lock down period and if the loan doesn’t close down within this period the lock expires. The borrower need to pay some additional fee to extend it, and if that is not appropriately done, you may have to reprocess all over again. This is more of a hassle, hence, anticipate or ask what is their expectations and then try to work towards that deadline. However, this date may be a bit negotiable with certain lenders. Some may even let you extend till 45 days or even 60 days may be. The longer the time you lock, you may have to pay higher closing costs with higher interest rates. This could be the best way to prevent any higher interest rate during the closing time.
While there are a numerous lenders, and most of them could be negotiated and price compared, you may have to struggle a bit to dig deeper into which company can offer better rates to you. Considering this, you can shop around to figure out the best possible option for your refinancing.
