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Refinancing Your Home Loan, Step by Step

Ready to tackle the whole refinance process? Below is our simple process


  1. Determine your goal. We’ve covered this: Refinance for the right reason. Aim to shorten — or at least maintain — your current loan term while lowering your interest rate.

  2. Learn your current credit score. Check your credit history and get your credit score. The better your score, the better the mortgage refinance interest rate you’ll be offered.

  3. Research your home’s current value. Check your neighborhood for recent sales of homes like yours. Estimate your home value with our assistance.

  4. Know your all-in costs. A home refinance can trigger a bunch of fees: application fees, the cost of an appraisal, origination fees, a document processing fee, an underwriting fee, a credit report charge, title research and insurance, recording fees, tax transfer fees and points, to name several. However, remember, you’ll get a clear estimate of mortgage loan fees from each lender you consider. And don’t jump blindly for a “no-cost refinance” pitch. This means the lender is moving the upfront fees to your ongoing costs for the loan, in the form of a higher interest rate — or a greater loan balance.

  5. Gather paperwork. This can be a bit harder these days because so many of us do our financial business online. However, you’ll have to gather, print or download statements, pay stubs, and whatever else the lender will need during the loan process.

  6. Lock your rate. You’ll have to decide whether or not, and when, to lock in your mortgage refinance rate with the lender, so the rate you’re offered for your new loan can’t change during a specified period before closing. For the logically minded, it’s a hand-wringer — more art than science.

  7. Have cash on hand. There are likely to be property taxes and insurance, closing costs and other expenses to pay at closing, so be sure to set aside enough to cover them. Again, it’s listed in your loan estimate, so there should be no surprises. In some cases, these costs can be added to the mortgage balance, which, on the one hand, limits your upfront costs but, on the other, increases what you owe on your home.

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