With mortgage rates at or near historic lows, many homeowners are considering refinancing. Refinancing is not for everyone, and there are associated costs to consider, but if you plan on being in your home for a while, the long-term savings that a refinance can provide could be well worth it. Want to learn more about how to go about refinancing and if you are a good candidate?
What is refinancing?
In simple terms, refinancing means replacing your original mortgage with a new one. When you go through the refinancing process, your first mortgage is paid off and you receive a new loan with a different interest rate and payment term. Refinancing allows you to take advantage of lower interest rates to modify your loan to work for you. You don’t have to refinance with the company who originally loaned you the money to purchase your home. When you switch mortgage companies, the new company will pay off the old home loan in full. Get more information about refinancing by contacting one of our mortgage bankers today.
What are my refinancing options?
Most people know that refinancing can be a great way to lower their interest rate, but there are a number of other reasons that refinancing may make sense for you. For instance, you can change the term of the loan or even choose to get cash out for home improvements or any investment of your choice.
Bank of Little Rock Mortgage offers our customers a number of refinancing options based on your needs and current financial situation. We offer all of the most common terms — 10-year, 15-year and 30-year loans — but we can also help you with a variety of other options. If you would like to lower your rate but not lengthen your loan, we can match the term remaining on your current loan in some cases. If you’re not sure which loan is the best fit for you, contact us today and we’ll be glad to help.
How do I apply for a refinance?
Applying for refinancing is just like the application process you used when you originally purchased your home. We will need the same documentation and personal financial information listed below. If you’re already familiar with the process and ready to get started, apply now.
The following items are required to process your loan:
- Pay stubs from the past 30 days
- Most recent two months’ statements for all bank and/or investment accounts
- Last two years’ W2 forms
- Last two years’ full tax returns
- Copy of your driver’s license and Social Security card
- Divorce decree (if applicable)
- Child support agreement (if applicable)
- Bankruptcy papers (if applicable)
- Certificate of Eligibility (for VA loans)
Note: If you are receiving a gift for any amount of money needed for closing, please inform your loan officer so you can receive instructions for the required forms and documents.
Closing on a new loan and beyond.
Here is a brief look at some commonly asked questions regarding the closing process. For even more in-depth information, please contact a Bank of Little Rock Mortgage representative today.
What happens at the loan closing?
The closing will take place at the office of a title company or attorney in your area who will act as our agent. If you are purchasing a new home, the seller may also be at the closing to transfer ownership to you, but in some states, these two events actually happen separately.
During the closing you will be reviewing and signing several loan papers. The closing agent or attorney conducting the closing should be able to answer any questions you have or you can feel free to contact your Loan Officer if you prefer.
Who will be at the closing?
The closing agent acts as our agent and will represent us at the closing. However, your personal Loan Officer will contact you prior to closing to talk about your final documents and to provide a final breakdown of your closing fees. If you have any questions that the closing agent can’t answer during the closing, ask them to contact your Loan Officer by phone and we’ll get you the answers you need — before the closing is over!
Will I need to have an attorney represent me at closing?
In some areas of the country it is very customary, and sometimes required by law, to have an attorney represent you at the closing. In other areas, attorneys are not as common at a real estate closing. Please contact the closing agent if you have questions about attorney representation. By all means, we recommend that you have an attorney at the closing if it would make you more comfortable. If your attorney has any questions about your new mortgage, please refer them to your Loan Officer. We’d be happy to provide any information necessary.
What is an appraisal?
To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property. National standards govern not only the format for the appraisal, they also specify the appraiser’s qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states. The appraiser will create a written report for us and you’ll be given a copy.
Do I need an inspection and an appraisal?
Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you’ve found the perfect home.
The appraiser will make note of obvious construction problems such as termite damage, dry rot, or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.
However, appraisers are not construction experts and won’t find or report items that are not obvious. They won’t turn on every light switch, run every faucet or inspect the attic or mechanicals. That’s where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.
Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.