If you would like to have a
lower monthly mortgage payment, one of the ways to do this is through a mortgage
refinance. Many people also use mortgage refinancing to be able to use some of the equity in their
home for other necessities. If you have wanted to know how qualifying for a mortgage refinance works, here is some
information that will help you to be better prepared.
You will need to qualify with a lender in order
to start the process to obtain mortgage refinancing. Some of the things you will
need is a government issued photo ID to prove who you are. You will also need to verify
income and income history, employment history, current assets, and current debts. The information you provide
will be used to determine your current debt to income ratio, and if it is within the limits set by that
particular lender, you will receive a pre-qualification notice.
You will want to talk to your lender about the
different types of mortgage refinancing products that are available, such as a streamlined refinance, a cash-out
refinance, or a Home Equity Line of Credit (HELOC). Deciding which type of loan is
best for you is as important as determining which type of loan you qualify for.
Once you are pre-qualified, you can take the rest
of the steps towards a mortgage refinance.
One of these is to have the home appraised to determine its current market
value must be larger than the amount you owe on the home, or the loan will be denied. This is one of the biggest
problems for people who have wanted to refinance over the past couple of years. If you find that your home's
value is less than the amount you owe, you may be eligible for some of the government options that may force the
lenders to refinance anyway or to provide a bad credit mortgage if your credit is
After you have qualified, had the house
appraised, and the lender has approved the underwriting of the loan, you will have to attend a closing at a
local title company. As the borrower, you will sign the paperwork and agree to make the new mortgage
payments. After everything has been signed, it will still take up to 3 business days for the money to
fund and pay off the old mortgage loan.
Once this has happened, you are under the terms of the new
loan. mortgage refinancing can be a great way to lower your monthly
payments and ease the strain on your budget.