Now that you’ve been in your home for a while, you may want to consider refinancing your mortgage. Whether you’re just exploring the idea or ready to start the process, this guide will help you make the right decisions for you and your family.
Published August 30, 2023
10 min readNow that you’ve been in your home for a while, you may want to consider refinancing your mortgage. Whether you’re just exploring the idea or ready to start the process, this guide will help you make the right decisions for you and your family.
First, it helps to start the process with a clear goal in mind. Consider the following questions to get clear on what you hope to achieve through refinancing:
Our smart, simple, and secure mortgage refinancing application provides customized options based on your goals. Check it out at laurelroad.com/mortgage.
There can be fees and risks associated with refinancing. Take them into account when weighing your options, and consider the following:
Follow these steps to start the refinancing process.
Your credit score affects the interest rates you’ll be offered, so check your current credit report. If there are issues with your credit score, address them before talking with lenders. Your debt-to-income ratio (DTI) is the monthly minimum payments on credit cards and other loans, divided by your monthly income. The lower the number the better, and most lenders usually look for a DTI of 43% or less. Get your annual free credit report at: AnnualCreditReport.com
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Lenders also look at is how much equity you have in your home. Equity is determined based on the current value of the home, not the price you originally paid for it. Review real estate websites for estimates of your home’s value and recent sale prices of comparable properties in the area. You’ll likely need to get an appraisal done, but this early research helps you see where you stand.
A refinance calculator will give you an idea of how much your new mortgage will cost. Look at both the monthly payment and the total cost over the full term of the mortgage. Then you’re ready to start getting quotes, but it’s important to understand how to navigate lender promotions – not all rates that are promoted may be available to you. And while there are “no closing cost” options, such programs typically roll those costs into the interest rate. While that might seem a small increase, it can add up over the life of the loan. Use our free online application to check your rates and see how much you could save: laurelroad.com/mortgage
Your lender will provide an initial loan estimate, which includes a breakdown of all the potential costs associated with your loan. A final closing disclosure will be issued three days prior to the closing
While requirements for personal and financial information can vary depending on your lender, there are some documents that you’ll probably need to provide to secure your loan. Be sure you check with your lender for any specific requirements. Here is a general checklist to get started.
Note: You are not required to provide a lender any verifying documentation until after you have received a Loan Estimate.
Rate locks can last anywhere from 30 to 60 days. A longer rate lock typically involves a slightly higher interest rate.
Once your loan has been cleared to close, you will receive your Closing Disclosure. This document will provide terms and costs associated with your loan request. It will also detail your funds needed to close or the total amount of cash back you will receive after funding.
As a national lender, Laurel Road helps determined buyers work smarter by providing personalized mortgage options at real, competitive rates. Our secure technology builds mortgages online, simplifying the process with clear options, transparent fees, and human support when you need it.
To learn more and refinance your mortgage online visit laurelroad.com/mortgage
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All credit products are subject to credit approval
IMPORTANT INFORMATION: The U.S. Department of Education recently announced a student loan debt relief plan which includes forgiveness of up to $10,000 for qualifying federal student loans and up to $20,000 for qualifying Pell Grant recipients. For more information, please read the announcement. Please note that if you refinance qualifying federal student loans with Laurel Road, you may no longer be eligible for certain benefits or programs and waive your right to future benefits or programs offered on those loans. Examples of benefits or programs you may not receive include, but are not limited to, student loan debt relief or public service loan forgiveness, repayment options such as Income Based Repayment or Pay As You Earn, or COVID-19 relief benefits such as a 0% interest rate, suspension of payments or loan forgiveness. Please carefully consider your options when refinancing federal student loans and consult StudentAid.gov for the most current information.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice, legal, financial, or tax advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. Calculators do not include the fees and restrictions that certain products may have. This calculator does not indicate whether you would qualify for a Laurel Road loan. Please visit the applicable banking product pages on laurelroad.com for specific terms and conditions.
This information provided is for informational purposes only and does not substitute consultation with a legal, tax or investment professional for important financial decisions. Laurel Road assumes no liability for loss or damage incurred by use of the information provided. Please visit laurelroad.com for full product details, terms and conditions.