Thursday , 22 June 2017
Refinancing Process in Detail

Refinancing Process in Detail

Refinancing means that you have a new loan instead of an old one with better terms and conditions expressed in lower interest rate. The difference can be really significant depending on the amount of the borrowed money and the difference of interest rates. And now the interest rates are at their historical minimum, so many people turn to refinancing.

For the beginning you can easily calculate the amount of money you can save having new terms by using online calculator available for free. Also people choose to have shorter period of repayment changing their 30-year plans to 20-s or even 10-s. In such case they will pay more money regularly, but the repayment period will be shorter resulting in less money spent eventually.

For people who are looking for informational support and further mortgage assistance there is information about mortgage & home loans company. So you can easily choose appropriate conditions with no hassle.

So if you are thinking about refinancing your mortgage, you should pay attention to different types available for you and choose the most correspondent one. Also you should take into consideration the fact that not only the interest rate plays an important role, but also other terms that make each situation particular depending on your own financial conditions.

Refinancing Process

Repayment Period

Depending on your regular income, you can choose short or long period of repayment. Some people have enough saving to make big first payment, but for someone it’s better to pay little charges during 40 years. So this depends completely on your financial possibilities.


When you refinance, you are required to pay “points” for closing your old mortgage. Each “point” equals 1% of your loan amount. Some of these points are just lender’s fee, but real “discount points” make your interest rate lower. So it’s a necessary question to your lender if these points have an influence on interest rate.

You should also know about the other costs you will face, such as application charge, mortgage underwriting fee, title policy, an appraisal, a recording cost and costs of attorney or special closing agent.

There is also an option of “no closing fees” that make all costs added to the total loan amount, in case you have no possibility to pay right now.

Mortgage Lenders

There is a vast majority of available lenders. You can deal with the ordinary commercial bank where you keep savings. You can also contact with different mortgage companies and even mortgage brokers. Sometimes it’s the best decision to deal with brokers, as they match borrows with appropriate mortgage lenders, so you will have only to choose the best variant.

To make the refinancing process easier you should follow these recommendations:

  1. Determine your current situation, understand the terms and conditions you have – this is your basic position.
  2. Check your payment history – it’s necessary to be ready to conditions you will be offered and have a possibility to negotiate them. Make sure there are no mistakes and don’t take any other credits during refinancing.
  3. Make a research – try to compare different companies and the terms they can offer you. Write down all information you find to make a comparing table. This will save you much money.
  4. Get your financial papers in order.
  5. Make sure you have enough funds to cover further refinancing costs.

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