Have you thought about refinancing your mortgage in the
near future? If so, you would probably welcome a thorough explanation of the process you will go through.

Knowing what to expect in advance makes the process much easier to navigate.

In simple terms, Refinancing means replacing an existing mortgage loan with a new mortgage loan with different terms. Common reasons to get a refinance mortgage include:
  • Paying off your first mortgage and reducing your mortgage rate and monthly principal and interest payments.
  • Paying off your 1st mortgage and taking out additional cash to consolidate bills, make home repairs, or any other reason you may need cash.
  • Paying off your 1st mortgage and reducing or changing your mortgage terms (i.e. refinancing from a 30 year loan to a 15 year loan).

WHAT DOCUMENTS WILL YOU NEED?

To begin the process, it is best to gather the following list of basic documents. Depending on your individual scenario, additional paperwork may be required further in the process:
  • (1) Full month of paystubs and recent year W-2 if a W2 wage-earner
  • (2) Most recent years of Federal Tax Returns (IRS 1040’s) with all attached schedules if self-employed or own investment property
  • (1) Full month of asset statements (i.e. Bank account, Money Market, or IRA). ALL pages will be required by the lender.
  • The Declarations Page from your current Hazard Insurance Policy for the property being refinanced
  • A copy of a recent mortgage statement

HOW DO I GET MY APPLICATION APPROVED?

Once your loan application has been received we will start the loan approval process immediately. This involves verifying your:
  1. Credit history
  2. Income and employment history
  3. Assets including your bank accounts, stocks, mutual fund and retirement accounts
  4. Property value through an appraisal. An appraisal, required by your mortgage lender, is a formal, written estimate of the home’s current market value
Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:
  • Fill out the loan application completely.
  • Respond promptly to any requests for additional documents. This is especially critical if your rate is locked or if you plan to close by a certain date.
  • Do not make any major purchases. Do not buy a car, furniture or another house till your loan is closed. Anything that causes your debts to increase might have an adverse affect on your current application.
  • Do not move money into your bank accounts unless it can be traced. If you are receiving money from friends, family or other relatives, please contact us first for the proper paperwork.
  • Do not go out of town around the closing date. If you do plan to be out of town when your loan is expected to close, you may sign a power of attorney, to authorize another individual to sign on your behalf.

CLOSE THE LOAN

After your loan is approved, you will be required to sign the final loan documents. This final step in the process will take place in front of an attorney. Be prepared to:
  • Bring a cashier’s check if any balance is due beyond your loan amount. Personal checks are normally not accepted.
  • Bring your Driver’s License or other recognized photo ID.
  • Review the final loan documents. Make sure that the interest rate and loan terms are what you agreed to. Also, verify that the name and address on the loan documents are accurate.
  • Sign the loan documents.
  • **PLEASE NOTE** Your loan will normally close shortly after you have signed the loan documents. On refinance and home equity loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close. This is called the right of rescission.

RIGHT OF RESCISSION?

The federal law (15 USC 1635) says if you refinance the loan on your primary residence from a different lender, you have 3 days to rescind. That means if you change your mind after you signed the documents, you can still get out of it within 3 days. It also means that the lender won’t fund your loan until the 3-day rescission period is over. There is no right of rescission on a purchase loan, or if you are refinancing from the same lender, or if the loan is not for your primary residence. The 3-day clock starts on the day AFTER the loan documents are signed and all the necessary disclosures and notices are given. Saturday counts as a recession day, but not a funding day. Sunday and bank holidays do not count.

READY TO BEGIN?

Getting started on the application process is easy. For your convenience, you can apply online today! If you prefer, contact us directly. Ascend Financial Network is ready to work for you!