Have Refinance Questions?
Look no further, we got your back with frequently asked questions.
Should I refinance?
There are many reasons to refinance, my friend, but every person has a unique situation. The most common reasons for refinancing are to lower your interest rate or monthly payment, reduce your mortgage loan balance, convert an adjustable rate mortgage (ARM) to a fixed rate mortgage , or to pull cash out of the equity in your home to consolidate debt or improve your home.
So you’re thinking you want to reduce your rate and payment? If this is the case, make sure you review your current interest rate. From there you can determine if it makes sense to pay points to lower your rate even more.
Have an adjustable rate mortgage that you’re thinking about turning into a fixed rate mortgage? Just know that your your rate and payment may increase, but many people gain peace of mind just knowing that the rate will never increase again!
If you are using the equity in your home to consolidate your debt, your overall loan balance and monthly payment may go up in exchange for the monthly savings from eliminating the debts that you pay off. We can run some numbers for you and help you determine whether or not refinancing makes sense for you.
How much can I save if I refinance?
Like we said, each person has a unique situation. The amount of savings depends on several factors -- your current interest rate and your motivation for refinancing. One tip – if your current interest rate is higher than the current market rate, it usually makes sense to refinance. Want to know your potential savings? Use our refinancing calculator with your specific numbers to check out the potential savings.
Am I allowed to refinance if my property value is less than what I owe?
Even though this doesn’t happen often, it may still be a possibility. Chat or call one of our Mortgage Bankers to see if we can help based on your specific situation.
What if I have a second mortgage on my home? Can I still refinance?
Usually second mortgages are paid off through a refinance – we consolidate both loans into one brand-spanking new loan so that you only have one monthly payment.
What are the costs associated with refinancing?
All fees associated with refinancing are different per lender but there are standard fees.. The standard fees usually include a credit report, appraisal, title exam and title policy, closing or settlement fees, notary fees and recording fees, depending on state laws. Other fees that pop up are lender fees such as processing and underwriting. You may also have to pre-pay certain costs such as property taxes, interest, and homeowners insurance. There are options for whether certain fees or pre-paid items can be added into your new loan.
What type of documentation do I need for a refinance?
The standard documents include paystubs covering the most recent 30 days, W-2s Tax Statements for the last two years, asset information (such as bank or mutual fund statements covering the last 60 days) and current loan information such as your most recent mortgage statement and homeowners insurance policy declaration page.
Can I refinance with bad credit?
It depends. We will have to see how bad it is and the reasons it is bad. You may be surprised by a loan that is the right option for you. Chat or call one of our Mortgage Bankers and let’s discuss it.
Is it true that you should only consider refinancing if you can lower your rate at least half a point or .5%?
When it comes to refinancing, there are many different reasons! For example, if you’re trying to consolidate debt, your loan amount and monthly payments may go up, but your overall monthly payments will decrease because you will have eliminated some or all of monthly debt payments (such as credit card bills or other obligations). Or let’s say you currently have an ARM and are looking to turn it into a fixed rate loan. In that case, monthly payments may increase, but you may be in a better long-term situation if your interest cannot change in the future or if you just want that “peace of mind”. So to circle back around to the main question – lowering your rate is a good thing, but it may not be the only thing that matters depending on your situation.
How long does it take for the refinance process?
When refinancing with vLoan you control the process. The technology we built for you allows you to be in the driver's seat – most of our refinance transactions close about 21 days after starting the process. You can take longer, but once we are provided your proper documentation, we will close your loan as fast as we can.
What happens at the loan closing?
The great part about vLoan is you don’t have to go anywhere to close your loan. Typically you would have to travel to a designated location to sign all the loan documents. Doing a refinance with vLoan allows you to digitally close – which means you can electronically sign -docs from anywhere. How great is that? Once the loan documents are signed and sent in, your loan will close in 3—5 days.