Most people are aware that we presently have some of the lowest mortgage rates in history, meaning that those currently stuck with high interest rates are dying to refinance and significantly lower their rate. Unfortunately, since most people are aware of this fact, that means you may get lost in the shuffle as homeowners inundate banks, brokers, and underwriters in order to save money. The good news is that Yahoo! Finance has 5 home refinance tips that you can use to keep your head above water and prevent jeopardizing or stalling your refinancing efforts.
Be Ready in Advance
If you are planning on submitting a loan refinance application, then you best be prepared before you even start the process. There are several articles of paperwork you’re going to need, so get them ready in advance. Be sure you have the most recent two copies of your pay stubs, W2s, tax returns, and every page of your two most recent bank statements. Doing this should help speed up your efforts.
Make Sure to Act Fast
You’ll need to get all your paperwork sent in to the lender within a day of locking in a rate. Cincinnati loan officer Dan Green of Waterstone Mortgage tells us why:
“Mortgage underwriting is first-in, first-out, and you want to be at the top of the pile. Therefore, sign your paperwork within a day and schedule that appraisal for as soon as humanly possible. Underwriting can’t begin until these two events have finished.”
Keep in Touch with Your Lender
Be sure to check in with your lender once or twice a week, even during the standard waiting period. Why? Because there’s always the chance that they will need more paperwork from you once they finally get around to your file, plus being diligent will ensure that things are progressing as they should.
Know What You Should Expect
You need to be upfront with your lender and ask them to give you a time frame on when they expect the refinance loan to be closed. That way, you can be sure to lock your rate in accordance to that time frame. You’d typically lock in your rate for 30 days, but these days, 30 days just isn’t long enough, thanks to the overwhelming number of applicants. Most refis are now taking anywhere from 45 to 60 days, so it’s probably wise to choose a number somewhere in that time frame. Yes, locking in your rate for longer may mean higher closing costs or slightly higher interest rates, but it’s a small price to pay in order to prevent being stuck with a higher rate later on.
If you opt for a regional or smaller local lender, you may be able to close on your refinance within 30 days. Lutherville, MD mortgage banker Michael Becker of WCS Funding explains thusly:
“Shop around and always check the pricing. When big lenders get overwhelmed they may raise their rates to slow down applications. Local companies can sometimes offer you services that the big guys can’t.”
In summation: be prepared, be quick, be communicative, and be informed. It will serve you well before, during, and after your refinancing process.
Stephanie Huskey is the resident real estate blogger for Movoto and would probably find these 5 tips helpful if she actually owned a home. Interested in getting her advice on your blog? She’s currently seeking guest blogging opportunities so she can share her knowledge with new communities! You can find her over here at Elance.com.