Refinancing your home is a great financial tool that can benefit many homeowners in the years after securing their original mortgage.
Refinancing is when you replace your current mortgage with a new loan that often has a lower interest rate, new individual mortgage terms, or a chance to cash out on your home’s equity.
At Penn Street Mortgage, we are here to help clients in Philadelphia, PA and beyond determine if refinancing is a good fit for them and help them get the best refinancing terms available. Our expert team of mortgage professionals are here to understand your mortgage needs and discover the best loan options for you.
If you are curious about the refinance process or are looking for a team of mortgage professionals to help you through a refinance, give us a call today! We would love to help you through the mortgage process and review your existing mortgage for better terms.
The Refinance Process – From a Home Mortgage Consultant
Just like the home-buying process, you should work with an experienced mortgage professional to help you make informed financial decisions and secure the best loan program for your refinancing needs.
Here is a step-by-step guide to the refinance process.
1. Determine Your Goal and Timing
Refinancing is not a one-size-fits-all solution, so it is important to understand what you want to accomplish with a mortgage refinance.
There are a lot of reasons you might want to refinance. From lowering your monthly payment, getting a cash-out refinance to tap into your home’s equity, reducing the term of the mortgage loans, changing from an adjustable-rate mortgage to a fixed-rate mortgage, or other reasons.
Ensuring the timing is right when going through a refinance is important. Will refinancing benefit you? The timing should be dependent on the market interest rates and what kind of refinance rate lock you can secure.
2. Review Your Current Mortgage
As your trusted mortgage advisors, we can help you review your current interest rates and determine the best loan programs available to you. Some loans have restrictions or clauses preventing you from refinancing, but we can sit down and explore your current mortgage terms. Customers who currently have FHA or VA loans might have specific streamlined refinancing options available to them.
Depending on when you made your home purchase and the current mortgage rates, you should work with a Philadelphia mortgage company to confirm refinancing is right for you.
3. Check Your Credit Score
Your credit score is a key factor in securing low rates. If your credit score has improved since you got your original mortgage, you could potentially qualify for a lower mortgage rate and save money on your monthly payment. Our team of mortgage professionals can help you check your credit score and see what kind of mortgage programs are best for you and the loan options you qualify for.
4. Calculate Your Home’s Equity
As you make payments on your mortgage, you will begin to accumulate equity in your property. You can also get equity when your local market has increased in value and therefore resulted in a higher property value for your home.
Your home’s equity is the difference between the current market value of your property and the amount you owe on your mortgage. If you have at least 20% equity in your home, you will have a better chance of qualifying for the best refinance rates.
5. Apply for the Refinance
Once you have spoken with our team of mortgage professionals and are ready to move forward with your refinance, your next step will be to fill out a loan application. Our mortgage advisors will work with a mortgage lender to verify your income, debts, and assets.
We do everything in our power to make the approval process simple and streamlined. We will communicate clearly with you to outline what kind of documentation you will need to submit to a lender, but it will generally be the same that you did for your original mortgage.
6. Get a Home Appraisal
Your lender or mortgage broker will order a home appraisal to get a current estimate of your home’s value. This is an important step in the loan process, as it confirms that your home’s value is established and the refinance amount will not exceed your home’s value.
Similar to when you originally bought the home, you want the appraisal to justify the amount you are securing in the new mortgage.
7. Close the Refinance Loan
Assuming your appraisal came in at value and your other verifications are complete, you will officially be approved for the closing! Our experienced team helps prepare your loan closing documents and work with the bank to ensure everything is good to go.
Once you sign these documents, your new loan will officially go into effect. At this point, if you completed a cash-out refinance, you will be able to access the extra cash that you have earned from the equity.
Then, you will begin paying your new mortgage every month!
Let our professional mortgage brokers guide you through the refinance process!
If you are considering refinancing your mortgage, let Penn Street Mortgage help you through the process. We will help you evaluate your existing mortgage and provide expert guidance on the best loan program for you and your monthly budget.
Our expert team at Penn Street Mortgage has been a trusted ﬁnancial partner in residential and commercial mortgages for nearly two decades in West Chester and Philadelphia, PA. We take great care of each of our clients — whether you are a first-time homebuyer or a seasoned real estate investor.
Use our free tools to get custom digital quotes and see how the right mortgage can change everything!