How do I refinance and what documentation do I need?
- Copy of previous 2 years W-2 forms
- Copy of pay stubs for last 30 days for all applicants
- Copy of driver’s license and social security card
- Copy of statement for deposit accounts, stocks, bonds, etc. for the last 60 days
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.
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.
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 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.
How do I know when 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!
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!
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 3 main categories:
- Lender fees. Fees paid to the lender for the processing of your loan, such as discount points and origination and application fees. Your loan officer can tell you what the actual cost to refinance is.
- Third-party fees. Fees paid for services rendered by parties other than the lender, such as title insurance, flood certification and home appraisal.
- Prepaid costs. Costs that are 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 having to pay 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 PMI Eliminator that 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 rates with no extra paperwork (it uses your existing FHA paperwork) no credit checks, and no extra hassle. It saves you time through the process, and money by securing you the lowest interest rate available on your current mortgage.
*The principal and interest payment on a $200,000.00 30-year Fixed-Rate Loan at an interest rate of 4.5% and 80% loan-to-value (LTV) is $1,013.38 with _____ points due at closing. The Annual Percentage Rate (APR) is 4.578%. The principal and interest payment does not include taxes and insurance, which will result in a higher actual monthly payment. The APR shown is for borrowers with a minimum FICO score of 760. Fannie Mae has adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes. If your mortgage is owned or guaranteed by Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. The HARP 2.0 program now allows borrowers to refinance up to 175% LTV. If the amount of the loan exceeds the fair market value of the home: (1) the interest on the portion of the loan that is greater than the fair market value of the home is not tax deductible for Federal income tax purposes; and (2) a tax adviser should be consulted for further information regarding the deductibility of interest and charges. All loans are subject to credit approval, property appraisal and other applicable loan requirements. Certain restrictions may apply. You can determine whether your mortgage is owned by Fannie Mae by checking the following website: http://www.fanniemae.com/loanlookup/