Apply to Refinance

Choosing Your Lender

Choosing to refinance your mortgage is a major financial decision. Being prepared with the right knowledge, the necessary documents, and the right lender will help make the process go smoothly.

These are some important questions you should ask when choosing a lender for your refinance:

• Will you sell my loan to another company after closing, or service it?

Not all lenders service their loans after closing. You may want to choose a  lender that services their loans for the life of each loan – so you know the handling of your loan won’t change

We  do not service any loans. So we do not want that to be a big deal. Most of our lending partners do service loans, but we really have no way to know if they will keep the loan or sell it off to another entity.

• What’s your availability?

You may find that you need to have someone available to answer your questions, even outside of normal business hours.

• What are your fees and rates?

Different lenders often have significant differences in their fees and rates. It’s usually a good idea to shop around to find the lender with the fees and rates that best fit your situation. However, keep in mind that the lowest possible rate may not equate to the best possible mortgage experience.

• How is your client satisfaction rating?

You may be dealing with a lender for as long as thirty years, so it’s important to check feedback from other clients to verify that working with your lender will be as pleasant as possible.

• Will I need to go to a branch, or can I complete the process online?

Having to drive to a branch whenever you need to submit documents can end up taking a lot of your time. Choose a lender who make the process as easy and efficient as possible, especially if you are short on time.

• How long with the process take?

If you need to close on your refinance quickly, you should find a lender who will make your loan a priority.

Documents Your Lender Will Need

You’ll want to get your financial documents ready before you apply, to ensure your refinance will close as quickly as possible. These are some things your lender will likely request:

• Your W-2s from the past two years
• Your bank statements from the last two months
• Your last two pay stubs

If you are applying for the refinance with someone else (such as your spouse), your lender will want these documents from them as well, to assess the complete financial situation of everyone on the loan.

If you are self employed, you’ll be required to provide more documents to show your income. Many lenders will want to see your complete tax returns from the last two years, so they can assess exactly how much you make and how much your spend on your business.

Costs Involved in a Refinance

You’ll generally have to pay these fees when refinancing:

Application fee

This is the cost you pay to your lender to process your application. With most lenders you’ll have to pay this even if your loan isn’t approved. However, Discount Loans never charges and application fee to begin with so this will not apply if you’re using our loan services.

Appraisal fee

Your lender will most likely want you to get an appraisal, so they have an accurate and current value for your home. In certain cases, such as a streamline refinance, you lender might be able to waive the appraisal.

Inspection fee

Certain loan types will require an inspection.

Attorney review and closing fee

This covers the costs of the lawyer who will conduct the closing for your lender, but keep in mind that not all states require a lawyer to close. For instance, Florida is not an attorney state. You can choose to close with an attorney but most deals in Florida close with Title Companies.

Title insurance and search

A title search is frequently required to ensure your home has no liens and that you are the rightful owner. Title insurance is a one-time cost which protects you and the lender against potential problems with the title to the property cause by a previous owner.

When you apply for refinancing, you lender will provide you with a Loan Estimate, which will give approximate costs and fees of your loan. Before closing, you’ll be provided with a Closing Disclosure, with a detailed breakdown of the exact final costs and fees.

Your total cost to refinance will generally be around two to three percent of the total loan amount. In some cases you may be able to roll theses costs into the loan, reducing the amount of money required up front.

How Long Will the Refinance Process Take?

Generally a refinance will take between 30 and 45 days, but there are quite a few variable that can cause it to take longer. Delays can come from any third parties that are involved in the loan transaction. You lender will usually work with a number of third parties, including title companies, appraisers, and inspectors, to close your loan, so be aware that delays can happen as your lender works to get necessary information from these other parties.

The length of your refinance can also be shorter or longer, depending on the specifics of your situation. If there are mistakes on your credit report, this can hold up the process. And changes in your financial situation, employment, or other aspects of your life can also cause delays. For example, if you open a new line of credit or change jobs in the middle of your refinance, it could push back your closing date. Keeping your lender updated on any changes in your life is the best way to minimize the delays that such changes might cause. Every lender is different though, Discount Loans typically closes 90% of refinances within 30 days with no issues.

Locking in Your Interest Rate

You will have the option to lock in the interest rate on your refinance once you’ve completed your application. Interest rates change every day, so locking in your rate protects you in the event rates increase significantly before your closing.

Generally lenders allow you to lock in your rate for thirty, forty-five, or sixty days. You may have to pay a fee if you need to extend the time beyond what you and the lender initially agreed upon.