Refinancing Can be The Way to Go

Written by: April Lunar


Refinancing your home may be a good idea. You can not only lower your interest rate and mortgage payment, you can get cash as well. This is a great idea if you would like to do some home improvement, take a vacation, or just consolidate your bills. You can refinance for any reason as long as it benefits you to do so. Refinancing your home can be simple. All you have to do is find a good mortgage company or bank that can give you the right information and show you the process. You will need your income documentation such as taxes, or W-2′s if you are employed full time. If you are self employed you will need your past 2 years 1040 income taxes to qualify. You will need a few more documents as well. Your loan officer will inform you of what documentation is needed to begin the process. 


An appraisal is an independent evaluation of your home to determine how much your home is worth. This is one of the only “out of pocket” expenses a borrower will have. The appraisal will vary in price depending on the size of your home. It will usually cost anywhere from $400.00-$600.00. The appraisal process usually takes about a week to complete. 

Underwriting Your Loan

Once you have submitted your documentation needed to submit your loan, it will be given to the underwriter for a full analysis of the documentation to determine if you will be approved. Once you are approved, the underwriter will determine the conditions needed to fund your loan. This list of conditions will usually consist of an appraisal, a credit report, a verification of deposit (VOD)to show how much funds you have on hand, a verification of mortgage (VOM), to determine your current mortgage rating, a verification of employment (VOE), to determine your employment and income. These documents will be ordered by the loan processor and will be submitted to the underwriter for review. The appraisal will also be ordered by the loan processor from an independent appraiser. The appraiser will determine the value of your property so the mortgage company or bank can determine the amount you can refinance your home for.

Your Loan is Approved

Once these items have been reviewed and approved by the underwriter, the loan processor will order your loan documents for signature from the borrower at the escrow company. Once the borrower has signed the loan documents, a 3 day rescission period is given. After the 3 day rescission period has expired the loan will fund. 

Better Interest Rate, Lower Mortgage Payment

Once your loan has funded, you will have a lower mortgage payment. This is due to the fact that you have lowered your interest rate through your refinance process. This is usually the reason homeowners refinance. They refinance to lower their mortgage payment, or they refinance because they want to pull cash out of their home, or sometimes they do both. You can lower your mortgage payment and also cash out from your refinance as well. If you do not want any cash from your refinance you can simply refinance to lower your monthly payment. This is called a “rate and term” refinance. 

Refinance to do Home Improvements

A good reason to refinance is to do home improvements. These home improvements include a inground swimming pool, a home theater, new flooring, as well as other home improvements to your property. A geat home improvement idea is to upgrade your kitchen and bathrooms. You can upgrade your kitchen by adding new appliances as well as other small upgrades. You can also upgrade your kitchen by painting your cabinets and updating the faucets in your kitchen. You can also change the flooring in your kitchen to a nice ceramic tile. You can also upgrade your bathroom also by changing the flooring to a nice ceramic tile. You can also change and upgrade the faucets in your bathroom. You can also upgrade the shower curtains or doors in your bathroom. This is a small upgrade that will add beauty and luxury to your home. These upgrades will also add value to your home. 

More expensive upgrades

You can upgrade your property by adding an inground swimming pool. This will add value to your home and will be enjoyed by your entire family. There are many places that will add an inground swimming pool to your home. This is becoming a popular home improvement idea. You can also do small improvements like beautiful paint, new couch covers, paintings, ornaments, beautiful rugs and hallway runners. Persian rugs are beautiful home improvement ideas. They will beautify any room. These are small home improvement ideas that can be done by the homeowner. Most small items needed for these improvements can be found at your local home improvement store.

Refinance and take a vacation or purchase more property

You can refinance and use the cash to treat your family to a wonderful vacation. Many people use the cash from their refinance to treat themselves. This is a great way to spend the proceeds of your refinance. You can also use proceeds from your refinance to purchase more real estate. This is a wise way to increase your financial portfolio. Purchasing real estate is one of the best investments you can make. You can use your new property as rental property. This is what investors do. They purchase properties to rent or re sell for a profit. 

Refinance to finance your child’s education 

Many people use the funds from their refinance to finance the education of a child. This is a great way to invest funds received from a refinance transaction. This will bring you future returns which cannot be measured. An education is one of the best financial decisions which can be made. This adds value to your child’s life and will benefit your family for many years to come.


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Refinancing Can be The Way to Go

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