The following are tips to help you gain an edge over other refinancing applicants and to make the loan process run more smoothly:

  • Know why you wish to refinance. In getting a home loan, there are many options. Not all of them will be perfect for your situation. Like buying a car, people refinance for various and personal reasons.  Do you want to refinance so you will have the lowest possible monthly payment? (That’s a trickier question than it appears.) Do you want to get rid of mortgage insurance? Do you want to pay off the loan quicker? Do you want to get cash by borrowing more than you currently owe? Do you want to brag about your low rate and make your friends and neighbors jealous?    You should know how long you will live in the home. Many homeowners want to refinance to get the lowest possible monthly payment, but that goal is not as straightforward as it seems. The lowest possible payment would come from an interest-only loan, but that type of mortgage is a good fit for only a few. Perhaps you want to lower your monthly payment, but don’t want to start anew. Just ask the lender to amortize the new loan for the remaining length of the current loan.
  • When you apply, ask your lender for a list of exactly what documentation and information you must provide. This step separates the fast customers from the laggards. If you’re applying in person, you can bring in the bank statements, pay stubs, tax returns and other paperwork when you apply, and if you’re missing a critical document, you can rush home and get it. Not so if you apply over the phone or the Web.
  • Lock the loan. Many lenders are telling customers that their loans will take up to 60 days to close. Other lenders stretch their estimate to 90 days. If you want to lock at today’s low rates, make sure the lock extends at least up to the lender’s estimate of how long it will take to close the loan.
  • With the delays and the worries over paperwork, borrowers get antsy when they haven’t heard from their lenders in a while. They want to know what’s going on with their loan. To call every few days probably won’t make things go any faster. Discuss with the lender or broker how often you want to be contacted, even if it’s just to hear that the lender is waiting for the appraiser to visit the house.

Related posts:

  1. Refinance at the Right Time
  2. Sell, Buy Or Refinance – Assessing Your Home Finance Strategies
  3. Home Buying Tip – Plan Your Attack
  4. Home Buying – Should You Buy Off The Plan Or Pre Loved?
  5. Do You Have An Assumable Mortgage?