You own a condo that has everything you need for comfort and convenience. The only problem is your mortgage interest rate is higher than the current loan rates. It's time to take the step to refinance your original loan. The hardest part of the condo refi is getting your paperwork together for your lender and preparing your digs to look sharp during the appraisal. The rest is up to your mortgage representative and the lender.
Step 1
Order credit reports from all three major credit agencies, including TransUnion, Experian and Equifax. Under federal law, everyone has the right to one free credit report each year.
Step 2
Report any mistakes online or write to notify the agencies of any errors on the reports. Follow the error reporting directions included with the credit reports.
Step 3
Hire a real estate agent to do a comparable listing search and market analysis of your condo. This analysis shows how your condo compares to other sales in your complex and in the immediate area. The "comps" help the bank justify the loan amount for your condo.
Step 4
Shop mortgage interest rates using the Internet. Note the length of the loan, any points, fees and private mortgage insurance required for the new loan. A point equals one percent of the loan. Borrowers pay the point fees to reduce the amount of the loan payments each month.
Step 5
Walk through your condo to see what might need "sharpened up" for an appraisal and make a list of the upgrades you've added since you bought the condo. Painting is the easiest thing to do to make your condo look more attractive.
Step 6
Get your financial paperwork in order and find your copy of the covenants, conditions and restrictions, known as the CC&Rs, for your condominium complex. Refinancing means your credit report and income statements, both required by refi lenders, undergo scrutiny to determine your creditworthiness for the new loan.
Step 7
Talk with a mortgage broker, bank lender or financial advisor to browse loans and interest rates available from the agent. Compare these loans with your online search and select a loan that best fits your personal needs and available cash.
Step 8
Fill out the refinance application and pay the fees for the refi, appraisal and title report. The lender requires a title search and title insurance to protect against any undiscovered loans taken against your condo. The insurance, included with the title report, also protects against any unpaid construction liens or other types of loans on your condo or condo complex.
Step 9
Meet the appraiser at your condo for the interior home inspection and pay for your report.
Step 10
Sign the official mortgage refinance paperwork.
References
- AnnualCreditReport.com: Request Report
- Realtor.com: What About the CC&Rs?
- Appraisal Institute: FAQs -- What Appraisers Do
- National Association of Independent Fee Appraisers: What Is An Appraisal?
- Federal Reserve Board: Looking for the Best Mortgage
- MSN Real Estate: 10 Tips to Boost Your Home's Appraisal
- Realtor.com: Frequently Asked Questions
Resources
Tips
- You received a copy of your CC&Rs when you bought your condo. If you can't locate these documents, order a new copy from your condo homeowner's association as soon as possible. Some associations meet only once a month.
Warnings
- Some agents provide free research of comparable sales and marketing reports, but be prepared to pay for the investigation.
Writer Bio
Lee Grayson has worked as a freelance writer since 2000. Her articles have appeared in publications for Oxford and Harvard University presses and research publishers, including Facts On File and ABC-CLIO. Grayson holds certificates from the University of California campuses at Irvine and San Diego.