5 Steps to Refinance

Refinancing your mortgage could let you lower your monthly payment, reduce your interest expense or get a loan with a fixed interest rate and payment. If you’ve been waiting to take advantage of those opportunities because you feel uncertain about the process to refinance, here are five simple steps that can help you navigate the refinance process:

1. Figure out your goals.
Do you want to refinance to lower your monthly mortgage payment, save money on interest costs, switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage or achieve a combination of those goals? Focusing on your reasons for refinancing will help you choose a loan that will enable you to accomplish your objectives.

2. Get ready to shop.
You probably already know how much your monthly mortgage payment is. But do you also know your current interest rate and the terms of your loan, if your rate is adjustable? That information can help you choose which loan you want. Peoples Mortgage can help you compare loan options based on current interest rates to your existing loan.

It’s also a good idea to check your credit score and try to estimate the current value of your home.  Equity is also a major factor in whether you’ll be able to refinance.

3. Shop for a loan.
It’s important to shop around and compare costs and terms when you want to refinance your loan. Costs and terms can vary from lender to lender, so it’s important to compare multiple options. You may also want to obtain loan offers from local lenders, banks or credit unions. Be sure to ask when the interest rate will be locked on each loan that you want to consider.

4. Compare loan offers.
When you compare loan options, it’s important to consider the terms and costs as well as the interest rate. Costs typically include a loan origination fee, an appraisal fee, closing costs and a new lender’s title policy.

5. Choose your loan.
Once you choose a lender and a loan, it typically takes several weeks to close your loan. During that time, you may need to complete a formal loan application, if you haven’t already done so, allow an appraiser into your home and obtain a cashier’s check to pay your closing costs.