Home Mortgage Refinance Are You Sure Of The Steps To Take

Mortgage With the present real estate market and the uncertainty of the mortgage interest rates, an increasingly large number of borrowers are struggling to make timely payments on their mortgage loan. As more people are falling behind on their monthly mortgage payments, they’re looking for options to become current on their payments and save their home from a forced foreclosure. Refinance is a worthy option that most homeowners resort to and this can easily assist you in avoiding the hassles of a forced foreclosure. But though you may know that this is the best option for you, are you aware of the steps that you’re supposed to take? If answered no, read on. Check out the steps in which you can refinance your home loan and pay the monthly installments on time.

  1. Check whether or not you qualify for the loan: Before you go for a mortgage refinance, you need to check whether or not you qualify for the new loan. You must initially answer the questions, ‘How much do you owe on the present loan?’ and ‘How much is your house worth presently?’ According to the thumb rule, homeowners need to have 80% LTV (loan-to-value) ratio in order to qualify for a mortgage refinance. However, with the new government assistance, this rule has been changed.

  2. Save money: The main goal of most homeowners who go for a refinance is to save money through the entire process. You can lower the interest rates, change the terms and conditions of the loans and make smaller monthly installments thereby saving money in the long run. But you must always check whether or not you’re actually saving money by choosing this particular option. It often happens that the term of the loan is extended to such an extent that the homeowner accumulates high interest rates in the long run.

  3. The required documents: Most lenders will ask for some particular information when it comes to refinancing your home mortgage loan. You will need your proof of income, monthly debt obligations, present bank and brokerage statements to prove your net worth, income tax returns and a copy of your credit report. Gather all these documents so that you don’t falter and elongate the process unnecessarily.

  4. The additional costs: You must check the additional costs that you may have to pay when you go for a mortgage refinance loan. Since it is a new loan, you’ll most likely require paying the closing costs that you had to pay the first time you financed your property. Check the average closing costs so that you may get an idea of the closing costs that you may need to pay in your state.

By taking the 4 steps mentioned above, you can easily refinance your present mortgage loan. Shop around and get quotes from multiple lenders so that you can settle on the best rate in the market and save the maximum amount of money through refinancing.

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