Many home owners refinance mortgages to take advantage of interest rates that are lower than when the loan was originated. Refinancing can lead to significant savings in the long run as even small reductions in the interest rate quickly add up when dealing with the large amounts typical of home mortgages. Fortunately, the process for refinancing a mortgage is relatively straightforward and can be accomplished in a short period of time.
Settle on a goal for the mortgage refinance before selecting a bank. Refinancing a mortgage loan can alter the length of the loan in addition to the interest rate. This can have an impact on the amount of the monthly payment as well as how quickly the loan is paid off. Decide if it makes long-term financial sense to pay off the loan quicker with higher monthly payments, or to lower the monthly payments with a reduced interest rate.
Prepare your finances to qualify for the best mortgage rates. Only the strongest applicants will qualify for a bank's best mortgage rates, so do everything possible to improve your credit score. For example, paying down credit cards is an effective way to quickly boost a credit score.
Consider the full cost of refinancing with a different bank. There are many fees and costs associated with refinancing that can represent a significant financial expenditure.
Contact several different lenders to get quotes on interest rates and fees. Settle on a lender that offers the best interest rate and lowest closing costs
Submit an application for the mortgage refinance using the website of the lender you chose. This application will be similar to the one you filled out for your original mortgage loan in that you will have to provide personal and financial information. Contact the lender's mortgage department if you have any questions about the application or when you can expect an answer on your refinance. Alternatively, you can visit the nearest branch and fill out the application there with the help of a loan officer.
- Thinkstock Images/Comstock/Getty Images
- Refinance Mortgage Tax Deductions Vs. Investment Mortgage Deductions
- Break-Even Analysis for Mortgage Refinance
- When Should You Refinance Your Mortgage?
- What to Do If Your Bank Denies Your Request for a Mortgage Refinance
- How to Refinance a 100 Percent Mortgage
- How to Refinance a Mortgage Through Freddie Mac
- Do I Have to Pay Anything Upfront to Refinance My Mortgage?
- How to Refinance With an Existing Mortgage Holder
- Reasons Why You Can't Refinance a Mortgage
- Can I Refinance My First Mortgage Without Refinancing My HELOC?