How to Simplify the Refinance Home Loan Process

How to Simplify the Refinance Home Loan Process

It would be an understatement to claim that the current economic crisis is troublesome. Prices are soaring left and right in just about every corner of the world. For real estate brokers and buyers, the situation is thus far from ideal. Few people will even consider purchasing property in this economy and those who do will most likely have to take out a loan. 

However, people looking for real estate are not the only ones in a bind. Those who have already taken out mortgages and purchased and renovated properties; are finding that the majority of their monthly mortgage payment is going towards interest rather than their principal balance; – in this case, it’s time to start considering refinancing. How to simplify the refinance home loan process.

The refinancing home loan process – what is it and why consider it? 

While the name may come across as a mouthful, the definition is quite simple. In short, refinancing allows you to secure a new mortgage – one with a considerably better interest rate. The process is a common route taken by many homeowners to decrease their monthly mortgage payments. It is also quite similar to securing an initial loan and may thus take between thirty-five and fifty days. 

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Now that the notion of refinancing home loans is laid out; it’s time to consider how the process works and what we can do to speed it up!

The right lender – a needle in a haystack  

The first step to refinancing your home loan is finding the right lender to do it. Most people fall into the trap of sticking with their current lender; even though their return rate may not be ideal. In addition, when refinancing loans, even your existing lender will require asset and employment verification from scratch, meaning that paperwork is unavoidable. Thus, before (re-)committing, do the research.  

In general, larger cities will be sprawling with lenders champing at the bit to accommodate new prospective customers. Furthermore, big-city brokers will often be experienced enough to accommodate individual interests and specific mortgage plans. In Australia, Sydney mortgage brokers are seen as both highly competitive and highly skilled, as most companies have years of tradition and experience behind them. Thus, before setting pen to paper, research and schedule a meeting – you’ll know the right broker when you see them!

The loan application process – paperwork at its finest 

While this portion isn’t a particularly exciting one, it still is necessary. Once you’ve decided on a broker, it is time to fill out the application form. In general, this process will take a few hours, meaning it is best to designate a time and place in hopes of expediting the process. Seasoned refinancing officers will have this process down to a tee, avoiding the risk of any paperwork going missing. 

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With that said, the refinancing paperwork will most commonly consist of your proof of income, insurance, credit information, debt statements, and one form of identification. However, as this may vary between both states and nations, it is best to double-check the paperwork with your lender. 

The loan estimate – will they or won’t they

After you turn in your completed refinancing loan application, it will take three business days to receive an answer from the mortgage lenders. However, keep in mind that this is not a final decision on either your part or theirs. The loan estimate only provides information to consider if and when the loan is approved. Most commonly, the estimate will contain information about the interest rate, monthly installments, total closing cost, and the cost of taxes and insurance. Once you go over the estimate with your broker, it is up to you to decide whether or not you will agree to the terms and conditions laid out in the document. 

Underwriting – a long, yet not time-consuming process

Without a doubt, underwriting is the longest portion of this process, taking anywhere between five to eight business days. However, with that said, the underwriting process doesn’t require you to do anything except wait. 

During this week, the lender will nit-pick your application to determine whether you qualify for the applied refinancing loan. In short, this means going over all the submitted paperwork and checking whether all the required documentation is present, as well as whether your finances will support the given loan. In other words, when you reach this step, just hold tight!

Closing – the final step 

The final and quickest step of this process is the final one. Once the loan is approved, all you need to do is go over the terms and conditions with your chosen loan officer and sign your name on the line. After that, you’re all done!

While the above steps may seem daunting at first, they’ll truly be a breeze with the right loan officer and a bit of pre-planning. Thus, just as with almost anything you do, organisation and a trusted team is all you need to speed up a process.