Refinancing Your Mortgage can get you lower Payment

 Limitations on refinancing can vary from state to state, so you’ll want to check the regulations for the specific state where the property is located. Another factor to weigh is payoff fees, which are different from prepayment penalties. While prepayment fees are meant to prevent you from paying off additional principal, an early payoff fee is a fee paid to the originating lender for loans that have only been on the books a few months. Your loan officer can tell you which types of loans carry these kinds of restrictions. 

 There are many options for managing closing costs for different kinds of refinance loans. Regardless of whether or not you receive closing credits from your lender, you often have the option of folding closing costs into your loan to avoid having to put up cash at closing. You may hear that 1.5% of your loan amount is a good rule of thumb for closing costs but it is always best to ask your loan officer about all your options. 

Many refinance loans can take 15-30 days to close but there are lots of exceptions if your finances are complex or you’re refinancing at a particularly busy time of year.

There are, however, steps you can take to limit your exposure to delays. Much of the documentation that you’ll need to provide for processing can be determined as soon as you know what kind of loan you will be applying for. Collecting and scanning documents like tax returns and income verification is a good start and can save you time during your application process.

• Proof of income – You will be asked to provide pay stubs (typically for the past 30 days) in order to verify income. Self-employed borrowers may be asked for different documentation.
• Copy of homeowners insurance – Verifying that your property is insured, or will be insured, is important to all lenders.
• Copies of your W-2 forms – Providing your W-2 forms will give your lender a much broader picture of your financial picture.
• Copies of asset information – Lenders are required to verify that you have the funds available to cover the various expenses of the loan. You may be asked for checking, savings and 401(k) statements, as well as investment records for mutual funds or stocks.
• Copy of title insurance – A copy of your title insurance is important to help your lender verify your taxes, names on the title and the legal description of the property.

Your lender will also need to pull your credit report as a part of the refinance process, so have your Social Security number handy when it’s time to apply.

Streamline refinancing was created to expedite the process of obtaining a new loan by referencing existing paperwork and data on a borrower. The process is not only faster but also easier for the borrower, since it can be completed without the full documentation required on standard conventional loans.

Opting for a streamline refinance can be a viable option for borrowers who want a lower interest rate or need to transition from an adjustable-rate mortgage (ARM) to a fixed-rate loan. Both the FHA and VA offer beneficial streamline refinancing programs to qualifying borrowers.