Choosing to refinance your home is a serious decision, though it can be the difference between struggling to make ends meet month after month, and getting the breathing space you need. Given the variability in home loans, it’s always best to work directly with an experienced broker who can go over the details of your existing home mortgage and help you find ways to save money.
The first step in refinancing your home is to consult with a broker. The refinancing process can be complicated and expensive, and it’s always a good idea to enlist the help of an expert who can counsel you in developing new loan terms. It’s important at this stage to ask about the costs associated with arranging a refinancing agreement. These costs differ according to the product you’re signing up for, and they can make a real difference in whether the refinancing makes sense in your situation.
Once you’ve done your research, it’s time to work with your broker to choose the right loan to cover the refinancing. Whether you opt for a fixed-rate loan, a variable loan, or a loan with an adjustable rate depends on your income and expense profile, expectations for future income growth, and any special incentives, such as a low introductory rate, that can make the loan more appealing.
The refinancing process goes much more smoothly and quickly if you’ve gathered your documentation in advance. For refinancing, you’ll need all of the standard income and expense verifications, as well as a few extra documents from your current lender. As your existing home loan has to be paid off as part of the refinancing process, be sure to get the most recent transaction listing of your loan which will indicate the amount outstanding.
Once your paperwork is assembled and delivered, your broker will review everything you’ve turned in to ensure your case meets all of the required criteria for a successful refinance. The broker typically presents you with an discharge form that must be filled out in order to proceed to the next step in the process.
With your documents and discharge form in hand, the broker you’re working with will approach lending institutions to arrange the terms of your new loan. This typically involves some negotiation and, eventually, the exchange of titles and other documents to close the deal.
Refinancing is potentially the best way to reduce your monthly payments, consolidate debts, and manage the high interest rates you’ve been carrying on other debts. By doing your research ahead of time, gathering the required documents in advance, and working closely with an experienced broker throughout the process, you can ensure a swift, smooth transition to the new loan you’ve been looking for.