The words ‘mortgage’ and ‘refinancing’ can be intimidating, but a little knowledge can easy your fears. I know as a first-time homebuyer, the amount of paperwork for the initial mortgage was daunting. Thankfully, refinancing is a bit easier than the original loan and it has the potential of saving you thousands of dollars!
Many people have refinanced several times over the past few years because interest rates have been so low. According to Freddie Mac’s most recent October report, the 30-year fixed rate mortgage is at 3.52%. Although recently rates have slightly increased, but it is still down from a year ago when the rate averaged 3.79%*. So check out if refinancing is right for you and take some of this information into account.
Find out if refinancing is right for you. Refinancing calculators give you a glimpse into the type of loan, length and other fees that may help you decide if refinancing is a good option. Reach out to your real estate professional for recommendations on mortgage brokers or contact your mortgage broker for a more in depth assessment of the possibility of refinancing costs.
Check your credit. Your credit may have changed since you initially purchased your home. This will give you a chance to see if there are any issues and correct them. By doing things like paying off credit card balances, you can sometimes help your credit score a bit before applying.
Shop around. From interest rates to fees, it pays to shop around for the best mortgage lender. You may want to try your bank, online and through a broker. There’s no such thing as too many options.
Get your paperwork ready. Mortgage rates change, so having everything ready it will make the process easier. Typically, you need: your tax returns for two years with W2s, your most recent bank and investment statements, and your two most recent pay stubs.
Don’t wait too long. If you have a rate quoted from your mortgage broker, get the paperwork to them as soon as possible to lock in that rate.
Source: *Freddie Mac