How to Easily Refinance a Home Without Pulling Your Hair Out
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It happens all the time – people buy homes and then, within a few years, decide they want to refinance the home to reduce monthly mortgage payments. Unfortunately, this is often easier said than done. While refinancing a home is often a wise idea, learning the ropes can be tough. If you’re wondering how to refinance a home, this piece is for you.
How Refinancing Works
During a refinance, a homeowner gets a new mortgage to lower the interest rates or monthly mortgage payment on their home or to pull cash from the value of the home to facilitate a large purchase. While it’s not possible for every homeowner, most financial professionals recommend waiting until you have equity in your home to refinance.
How to Refinance a Home: 3 Steps
Refinancing a home doesn’t have to be stressful – just follow these three steps:
1. Consult a refinance calculator
The first phase of this process is to refer to a mortgage refinance calculator to find out what your mortgage would look like after the refinance. This helps you understand what to expect from the refinance process.
2. Shop around
Once you know what you’re dealing with financially, it’s time to find someone to give you a great rate. Be advised that different banks offer different mortgage refinance rates, so it’s important to do your due diligence to find the best deal in your area. To get accurate quotes, you’ll need to know your credit score and your home’s current value. You’ll also need printed copies of things like pay stubs, statements from investment accounts, and anything else your lender needs to grant a loan.
3. Choose your rate
Once you’ve found the bank that offers the best rate, it’s time to commit. At this point, you’ll have to decide whether or not to lock your mortgage refinance rate, which is a decision best made with your financial advisor. Keep in mind that there are often additional expenses (in the form of closing costs and such) associated with a new loan, so you’ll need to ensure you can afford these before you sign the paperwork.
Mortgage Refinancing Made Easy
While learning how to refinance a home can seem intimidating, it doesn’t have to be difficult. These three simple steps can help you refinance your home quickly and easily and get back to living your life as quickly as possible.
