For people struggling with high mortgage payments, deciding to refinanceis a no-brainer in this season of record-low interest rates. Indeed, the time is ripe for those who plan to take advantage of the new mortgage rate climate, whether you intend to take out a portion of your equity as cash, remove or add a name in your mortgage documents, or switch from fixed-rate to ARM.
Whatever your reason, you’d want this renewal of terms to move as hastily as possible. There may be factors down the line that would pose as roadblocks to your refinancing, but if you understand the dynamics and know what to expect, you can help facilitate a faster closing refi procedure.
Here are simple yet often overlooked ways that can help you get through your refi process in no time:
Prepare documents and paperwork
One of the most common reasons for delayed closing is the delay of paperworks. Refinancing is basically the same as your original home loan acquisition process. Be ready with your financial documents ahead of time and forward them to your lender as soon as possible.
Refinancing documents needed include:
– Pay stubs from the past two to three months
– Tax Returns and W-2’s and/or 1099’s
– Statements of outstanding debt
– Statement of assets
State your finances as it is
If your financial situation has changed since you got your first mortgage, report them to your lender. This would help them find the best mortgage refinance program that suits your current finances. If you report them late, they will have to restart the process to evaluate which options suit you best, and if you want a faster closing, not being honest about it upfront wouldn’t help.
Keep your current financial set up
Don’t quit your job, don’t take large debts, or change your employment while you are in the process of refinancing. Doing these might hinder your chances of qualifying for a refi.
Work hand in hand with your appraiser
An appraisalis required to determine your home’s market value. This is conducted by an appraiser who will schedule a meeting with you to evaluate your home on site. Coordinate the meeting as soon as possible because your lender will not move on with the processing of your refi application if the home’s appraised value is not determined.
Know your credit score
Your credit score is a primary determining factor in deciding whether to refinance or not. Knowing where you stand in your current finances lays the groundwork for your next decision. If you have excellent credit, you can proceed with your application. Otherwise, you might consider waiting a bit more to build good credit.
Follow Up
Check for updates. Keep in touch with your lender for further information about the progress of your refi process. Ask if there are some more documents necessary and work on them the soonest time possible.
The typical refi closing takes about two to four weeks. Maximize your resources and efforts and use these simple tips to get ahead and close soon.
