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MORTGAGE REFINANCE

A Simple and Quick Guide to the Refinance Process

A mortgage refinance is when you acquire a new loan with different terms to pay off your existing mortgage.

Whether your reason to refinance is to have a lower interest rate, lower monthly payments, get cash out, change the terms of the interest rate from adjustable to fixed, or use your recently increased credit score to qualify for better terms, we will take you step-by-step through the entire mortgage refinance process.

STEP-BY-STEP REFINANCE PROCESS

CHANGE TO A MORTGAGE LOAN ESPECIALLY TAILORED TO  YOUR NEEDS
  • refinance-goal

    Refinance Goal

  • pre-approval

    Pre-Approval

  • loan-process

    Processing

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    Appraisal

  • loan-underwriting

    Underwriting

  • loan-closing

    Closing

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    Funding

Step 1: Determine Your Goals

Together we will review your goals and choose a new loan that will benefit you the most.

Whether you’re looking for a lower monthly payment or you want to use the built-up equity in your home, Fourpath Mortgage will certainly be able to find a product that makes sense.

Step 2: Review Options

The options we review with you will be determined by your goals.  Here are possible reasons for you to want to refinance your mortgage:

1.  Lower Your Existing Mortgage Payment

A lower interest rate will lower your monthly payment.  We can show you how this option can possibly save you money over the years.

2.  Pay off Your Mortgage in Less Time

We will help you lower your loan’s term in an effort to finish paying the balance faster.  For example, if you currently have a 30-year loan, we will show you the monthly figures if you switch to a 15-year loan.  We’ll compare the pros and cons of each option.

3.  Switch from an Adjustable Rate Mortgage (ARM) to a
Fixed Rate

If you have an ARM, there is an initial fixed-rate period.  Once that period is over, you may choose to refinance into another ARM or switch to a fixed-rate loan.  The rate is important in determining the amount of your monthly payments.

4.  Get Cash Out

If your home has accumulated equity, it is possible to get it out as cash to use for various reasons.  Perhaps paying other debt, taking care of other expenses or projects in your life, or starting a college tuition fund for your child.

5. Discontinue Mortgage Insurance

Private Mortgage Insurance (PMI) is required if you’re refinancing your home with less than 20% equity.  There are conventional loans that do not require PMI under certain terms. The cost of paying PMI for the whole term of the loan can be costlier than refinancing to drop PMI payments.  Our team often uses this strategy to help clients save money.

Refinancing your mortgage is not always a good idea at a particular time.  We will help you determine if this option makes financial sense for you. We will offer other suggestions if we see that a refinance will not benefit you.

apply-now

Begin Your

Refinance Process

Step 3: Mortgage Application

Once you decide that a refinance is right for you, we’ll thoroughly review all sections of the mortgage application.  As a result, you’ll have to submit financial information that helps the lender approve you.

A complete loan application includes:

  • Legal Name

  • Income Information

  • Credit Report

  • Address of Property

  • Home Appraisal

  • Loan Amount

    (balance due on current loan)

home-buyers

Of course, we are there for you at every step of the application process, you’ll have our full guidance.  Our staff submits an application that is complete and has the most potential for approval, verifying that all of the information is valid and accurate.

Step 4: Select the Best Loan Product

Considering your financial goals, we will surely help you choose the most beneficial financial product.  To help me determine the best option, we will discuss whether a fixed or adjustable mortgage is best for you and how it impacts the amount of your monthly payment.

In addition, we will also discuss the length of time you plan to stay at the home, and the current interest rates available to you.

 

 

Here are some of the refinance options we offer:

  • Rate and Term

    This option is usually chosen because there’s a significant improvement in interest rates or your credit score resulting in lower rates and monthly payments.  Our goal is to save you money over the life of your loan.

  • Cash-out Refinance

    You will be able to get cash out of your equity to use as you need.  This option increases your loan amount, as you are turning your equity into cash and paying settlement costs.  This type of refinance allow families advance other projects that require funding.

  • Home Affordable Refinance Program (HARP)

    This is a refinance option for homes that are considered primary residences, one-unit second homes, or a 1-4 unit investment properties.  The loan must have been originated on or before May 31, 2009.

  • FHA or VA Streamline

    This type of refinance allows current FHA or VA borrowers to refinance their mortgage with minimal documentation, and possibly without an appraisal.

Step 5: Gather Required Documents

Your application will be verified by submitting the following documents to the lender:

Proof of Income

Original pay stubs for the last 30 days.  We can explore other options if necessary for your specific scenario, such as bank statements or tax returns.

Homeowners Insurance

Verifies that your property has current and sufficient coverage.

Tax Forms

Tax forms like W-2’s and 1099’s to verify employment and income history.

Total Assets

Documents all of your assets aside from your home including savings accounts, stocks and bonds, CDs, mutual funds, retire funds such as 401Ks, and other real estate.

ID/Passport

Copy of ID/Passport – verifies your identity.

Step 6: Lender Provides a Loan Estimate for your Review

Without a doubt, by law, the lender must provide you with a Loan Estimate once the application and documentation is submitted.  This important document reviews your estimated new interest rate, monthly payment, and closing costs for the loan.

Step 7: Appraisal

The lender needs to consider the estimated market value for your home by reviewing an appraisal to determine the maximum loan amount and terms available to you.

Not sure which program

is right for you?

Step 8: Underwriting

Diligently, we will collect your paperwork, find out your credit score, and obtain a home appraisal.  Our experience with successful closings and our network of professionals will take you through this important step with confidence.  Without fail, we will keep a close eye on any additional items required to get you approved and ready to close on time.

Step 9: Conditional Approval

The underwriter approves the loan on the basis of you satisfying all remaining pending conditions.  This is an important step that has to be completed immediately to lock-in the rate. We will closely follow your case with the underwriter and diligently communicate with you to exactly fulfill additional requirements necessary for approval.

Step 10: Review and Sign the Closing Disclosure

The underwriter approves the loan on the basis of you satisfying all remaining pending conditions.  This is an important step that has to be completed immediately to lock-in the rate. We will closely follow your case with the underwriter and diligently communicate with you to exactly fulfill additional requirements necessary for approval.

Step 11: Closing the Loan

Once the lender authorizes the closing, a date will be scheduled to sign the final documents and pay closing fees.  The following documents require your signature prior to closing:

  • Promissory Note

    Your signature approves the loan amount, terms, and monthly payment.  It details the monthly payment information and where to send these payments.  The consequences of late or default payments are also explained within this document.

  • Mortgage - Security Instrument – Deed of Trust

    All these three names describes this document, which pledges your home as collateral for the loan.  With your signature, you give the lender the rights to your property if you foreclose.

  • Initial Escrow Disclosure

    Details all charges you will pay into escrow each month as part of the mortgage agreement.

  • Affidavits and Declarations

    This is a legally binding document that explains the rights and duties as a homeowner.

  • Right to Cancel Form

    You’re given three business days after closing to change your mind. This form explains the process and consequences of canceling your loan.

Step 12: Funding the Loan

This process takes up to three business days after closing.  Lastly, we will inform you when the loan is funded.

apply-now

Begin Your

Refinance Process