Frequently Asked Questions
How do I qualify for a home refinance?
Depending on your refinance goals, there are many factors that go into qualifying for a home refinance. The most important factors being your income, the amount of debt you owe, credit standing, your home’s current value and how much you are trying to finance. A licensed loan officer can tell you which programs you qualify for. Apply Now to find out what you qualify for!
How do I know when to refinance? What documentation do I need to refinance?
Deciding when to refinance depends on your individual goals. Ideally, the best time to refinance is when interest rates are lower than the interest rate on your current home loan. For example, suppose you have a fixed-rate mortgage, but interest rates have declined since you first obtained your loan. A lower interest rate can reduce your monthly payment when you refinance. Just a few minutes on the phone with a licensed loan officer can help you determine if now is the right time. Calculate and compare payments with our refinance calculator.
- We'll need two years W2's and tax returns
- Copy of your pay stubs for the last 30 days
- Copy of driver’s license and social security card
- Statement copies for deposit accounts, stocks, bonds, etc. for the last 60 days
Is an appraisal required to refinance my home?
Although most home financing programs do require an appraisal, there are currently home loan programs available that may not require one. Choosing the right program for you depends on your individual refinance goals and various qualifying factors. A licensed loan officer can help you determine which programs do not require a home appraisal and best fit your needs. Apply Now to get started today!
How much home equity do I need to refinance my mortgage?
Most refinance loan programs require some equity in your home to refinance. However, if you owe more than your home is worth, the newly revised Home Affordable Refinance Program (HARP) offers Fannie Mae and Freddie Mac loan holders the ability to refinance regardless of home value. A Shore Mortgage Loan Officer can help determine if you qualify for this program. Apply Now to get started!
How much lower should interest rates be before you consider refinancing?
You may have heard a general rule of thumb that your new interest rate should be at least 1 percentage point lower than your current rate for the new loan to result in significant savings. However, this is just a rule of thumb. You need to consider how long you plan to stay in your home and whether that amount of time will justify your upfront costs in refinancing your mortgage loan. An experienced loan officer can tell you if refinancing makes sense. Calculate your new potential payment and Apply Now to get started today!
What costs can I expect when refinancing?
You will be provided with an estimate of your closing costs soon after your application has been reviewed. The cost of refinancing can be divided into three main categories:
- Our fees. Fees paid to Shore for the processing of your loan, such as discount points, origination and application fees. Your loan officer can tell you what the actual cost is to refinance.
- Third-party fees. Fees paid for services rendered by parties, such as title insurance, flood certification and home appraisal.
- Prepaid costs. Costs collected at the time of closing for items such as prepaid or per diem interest, property taxes and hazard insurance.
To get a general idea of closing costs, talk to a licensed loan officer for clear expectations.
How can I refinance and avoid paying monthly PMI?
If you have less than 20% equity in your home, most loan programs require you to pay monthly mortgage insurance. However, Shore Mortgage offers a loan program called the PMI Eliminator, which eliminates the additional monthly cost for you. Talk to a loan officer to find out if you qualify for this program.
What is a Streamline Refinance?
The government in the early 1980's saw a need to help Americans gain a more efficient way to lower their monthly mortgage program, and thus sprung the FHA Streamline Refinance program. This program allows any person with a FHA loan to lower their monthly mortgage rate with no appraisal. It saves you time and money through the process, by securing you a lower interest rate without all the hassle.
How much can I afford?
Check out our useful affordability calculator to help you figure out how much home you can afford!
What is a down payment?
Most mortgage lenders typically require a cash down payment of 5%, 10% or 20% of the sale price. If you can put down more than your lender requires, say 25 to 30%, your lender may be willing to overlook credit blemishes, approve your loan without verifying your income or both. If you come up short on the down payment, with less than 20% of the buying price before your loan is approved, you may have to obtain private mortgage insurance, or PMI, to protect the lender. You can often lower your mortgage payment or afford a more expensive house by putting more money down.
How long does the process take?
Typically, the whole process takes about 30 days from application to closing.
Do I need to have a home inspection?
A home inspection will cost you a little bit of time and money, but in the long run you'll be glad you did it. The inspection can reveal problems you may be able to get the current owners to fix before you move in, saving you time and money. If you are a first-time homebuyer, an inspection can give you a crash course in home maintenance and a checklist of items requiring attention to make your home as safe and sound as possible.
What is an appraisal?
A real estate appraisal helps to establish a property's market value–the likely sales price it would bring if offered in an open and competitive real estate market. We will require an appraisal when you ask to use a home or other real estate as security for a loan. We'll make sure that the property will sell for at least the amount of money you're borrowing.
What happens at the closing?
You’ll sit down with your real estate agent, the agent for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While they will give you a basic explanation of each paper, you may want to take extra time to read each one. Before you go to closing, we'll give you a "good faith estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to call your Shore Mortgage Loan Officer before you go to closing.