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    NP WD 2 Refinance

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    Damien Afari
    Refinancing allows homeowners to obtain a new mortgage with a lower interest rate or different term, such as switching from a 30-year to 15-year mortgage. When refinancing, homeowners choose between a fixed-rate mortgage with stable monthly payments or an adjustable-rate mortgage with initially lower rates that may increase over time. The refinancing process involves qualifying based on credit score, income, and debt-to-income ratio then completing documentation, getting preapproved, preparing for closing, and signing paperwork.

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    NP WD 2 Refinance

    Uploaded by

    Damien Afari
    103 views2 pages
    Refinancing allows homeowners to obtain a new mortgage with a lower interest rate or different term, such as switching from a 30-year to 15-year mortgage. When refinancing, homeowners choose between a fixed-rate mortgage with stable monthly payments or an adjustable-rate mortgage with initially lower rates that may increase over time. The refinancing process involves qualifying based on credit score, income, and debt-to-income ratio then completing documentation, getting preapproved, preparing for closing, and signing paperwork.

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    Refinancing allows homeowners to obtain a new mortgage with a lower interest rate or different term, such as switching from a 30-year to 15-year mortgage. When refinancing, homeowners choose between a fixed-rate mortgage with stable monthly payments or an adjustable-rate mortgage with initially lower rates that may increase over time. The refinancing process involves qualifying based on credit score, income, and debt-to-income ratio then completing documentation, getting preapproved, preparing for closing, and signing paperwork.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    103 views2 pages

    NP WD 2 Refinance

    Uploaded by

    Damien Afari
    Refinancing allows homeowners to obtain a new mortgage with a lower interest rate or different term, such as switching from a 30-year to 15-year mortgage. When refinancing, homeowners choose between a fixed-rate mortgage with stable monthly payments or an adjustable-rate mortgage with initially lower rates that may increase over time. The refinancing process involves qualifying based on credit score, income, and debt-to-income ratio then completing documentation, getting preapproved, preparing for closing, and signing paperwork.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Refinancing at Prairie Savings and Loan

    Refinancing allows you to obtain a new mortgage at a lower interest rate, or for a different term. For
    example, you might decide to refinance to switch from a 30-year mortgage to a 15-year mortgage. This
    fact sheet summarizes what you need to know to refinance your home mortgage.

    The basic terminology is the same for any mortgage. The amount of money you borrow is known as the
    principal, and the money you pay to a financial institution for lending you the money is the interest. Part
    of your monthly payment goes to paying the interest, and part goes to paying off the principal. With
    most mortgages, your early payments primarily pay off the interest. Then, over time, your payments
    increasingly reduce your principal. The more principal you pay off, the more equity you have in your
    home.

    Choosing a Type of Loan


    Homeowners often choose to refinance because they are interested in obtaining a different type of loan
    than they had when they first obtained a home mortgage. The two major categories are:

     Fixed-rate mortgage: A fixed-rate mortgage maintains the same rate throughout the entire
    payment period. This means your monthly payment will never change. The advantage of a fixed-
    rate mortgage is stability; your payment is the same every month. However, interest rates for a
    fixed-rate mortgage are slightly higher than for other types of loans.
     Adjustable rate mortgage (ARM): The interest rate for an adjustable-rate mortgage changes
    throughout the course of the payment period. Most commonly, the interest rate for an ARM
    changes yearly, although some start out at a single rate for several years, and then adjust. The
    advantage of ARMs is that they typically start out at a lower rate than fixed-rate mortgages.
    However, over the long term, you can end up paying a much higher interest rate as the ARM
    adjusts to reflect prevailing interest rates.

    In addition to deciding between a fixed-rate and an adjustable-rate mortgage, you also need to decide if
    you want to take advantage of your home equity to borrow additional funds.

    Qualifying to Refinance
    The loan agents at Prairie Savings and Loan considers several factors when evaluating any loan
    application, including a refinancing application. The three most important considerations are:

     Credit score
     Basic income
     Debt-to-income ratio

    You will need to provide the same documentation required when you applied for your original home
    mortgage:

     Social Security number


     Proof of employment history for the last three years
     Pay stubs
     Tax documents for the last two years
     W-2 statements
    o Tax returns
    o Proof of current residence
     Bank account information
     Credit report
     Real estate contract
     Letters documenting any financial gifts from family or friends that will help fund your house
    purchase
     Itemized list of monthly expenses

    When refinancing a rental property, you will need to provide additional documentation. Please see your
    loan agent at Prairie Savings and Loan for details.

    Refinancing Process
    The refinancing process is similar to the process for applying for your first mortgage:

    1. Complete the online form


    2. Supply the required documentation.
    3. Get preapproved for a specific amount.
    4. Prepare for closing
    5. Sign the paperwork at the closing.

    The complete process can take up to two months, so if you are refinancing in order to begin a
    remodeling project, be sure to consider timing when submitting your application.

    Prepared by: Afari Damien

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