The Home Loan Refinance Process

Everything you need to know about the home loan refinance process is here. We'll explain what to do from applying to closing.

Home Loan Refinancing: A Step-by-Step Guide

We've broken down the home loan refinancing process into these simple steps.

1. Making the decision to refinance. Before you apply for a home loan refinance quote, you want to be sure refinancing is in your best interest. Experts usually recommend that you refinance if rates are 1/2% to 5/8% lower than your current mortgage's interest rate. Similarly, the short-term costs of refinancing may outweigh the savings if you don't plan to stay in your home for at least another several years. To help your decision, here are some of the benefits of refinancing:
• Pay off your mortgage more quickly by shortening your loan's term
• Lower your monthly payments
• Reduce your interest rate
• Lower your interest expense over the life of the loan
• Get cash to pay off debts or other expenses
2. Select a loan. When you apply for a home loan refinance quote, you'll need to know what kind of loan you want. You can get a home loan refinance quote on an adjustable-rate or fixed-rate mortgage. Here is a brief explanation of each:
• Adjustable-rate mortgage (ARM) - these loans have interest rates that fluctuate according to the market rates. The initial interest rate on an ARM is low for a limited period ranging from one to ten years. After that, the rates will fluctuate. When market rates are not very low, an ARM is a good refinancing option because of the low initial rate.
• Fixed-rate mortgage - these mortgages have rates that remain constant for the life of the loan. When rates are low, you might consider a home loan refinance quote on a fixed-rate mortgage. You will safeguard yourself against rising rates and will have consistent monthly payments for the duration of the mortgage.
3. The application process. By using our site to get your home loan refinance quote, you simplify the application process considerably. Your home loan refinance quote application will typically ask for the following information:
• Personal information (name, social security #, address, etc.)
• Assets
• Income
• Debts
• Credit history/credit references
• Property information (information about your home)
4. Closing. When you close on the loan, you meet with a closing agent (a title company, attorney, or signing company) to sign the mortgage documents. Once you close on the loan, the refinancing process is complete.

To find out why you should refinance, see our Top Reasons to Refinance page.