It seems many homeowners do a mortgage refinance, Jacksonville, FL. But this does not mean you jump on the bandwagon – not so fast. You have to be careful and do the needed evaluation. Else, you might end up getting an unfavorable mortgage deal.
Mortgage refinance, Jacksonville, FL, means taking out a new home loan to replace your old one. Homeowners who want to stay in the same home but with different mortgage terms choose this mortgage option.
So, are you one of those people planning to refinance a mortgage? Here are the steps that can guide you through the process.
Step 1: Determine what you want to get out of the refinancing process.
Determining the purpose of refinancing can help you navigate the process a lot easier. What’s your goal? Do you want to pay off your home more quickly? Or do you want to save some amount by taking advantage of low-interest rates?
Step 2: Evaluate your financial situation.
A healthy financial situation is crucial when applying for a mortgage refinancing. It is key to getting a good deal. What is your credit score? How about your debt-to-income ratio? How much equity do you have in your home? If you find out your financial situation is not strong enough, you might want to wait until it gets better.
Step 3: Shop around for the best rates.
Shop and compare are strategies that never get old. With the help of a mortgage broker, you can gather information about lenders giving the best deals. The process should come a lot easier today, given that lots of this information are readily available online.
Step 4: Submit refinancing applications to multiple lenders.
Speaking of shopping around, apply for pre-approval with several lenders to evaluate and compare one offer to another. Getting pre-approval letters from different companies will help effectively compare interest rates side by side.
Step 5: Pick your lender and refinance terms.
Step #4 should allow you to compare each lender’s interest rates and fees and make a sound decision on which one to choose based on your criteria. You will also need to decide whether you take a fixed-rate or adjustable-rate and a term length. Again, your decision should match the goal you want to achieve.
Step 6: Undergo an appraisal.
Note that not all types of mortgages require an appraisal when you refinance. But in case your lender requires a home appraisal, you will want to schedule it pretty soon after locking in your rate as rates stay locked in only for a certain period, usually 60 or 90 days.
Step 7: Choose your refinanced mortgage.
Finally, you close on the loan before your rate lock expires. It is the time when you will pay the closing fees. The closing process is similar to how you applied for your first mortgage, only that you already live in the property this time.