Guide to Refinance Your House with Some Tips to Speed up the Process

by Ben Stokes Freelance Blogger

Refinancing the house is a lengthy process that may take a month or two to process. It is well worth the time and effort with the reduced installments and overall cost of the loan. Still, many homeowners are not aware of the refinancing process that can save them significant money.

Also, there are some misconceptions about the length and complexity of the process. You might have heard that it takes months and a lot of effort to get approval from the lenders. On the contrary, the actual procedure takes less than 45 days if the borrower has prepared well for it.

Here, we have mentioned the steps to refinance the house and some tips to speed up the process.

Set the Goals

You must set the goals as the reason to go through the trouble of refinancing the house. A lower interest rate is the most common reason for homeowners to change their current lender. The duration of the loan also has a considerable impact on the overall cost of the loan.

Your search for the lender will start after defining the end goal. If the installments are hard to manage, search for lower interest rates or longer loan duration. Or reduce the term if you want to repay the loan at a faster pace.

Find the Lender

You should start the search for the right lender once the goals have been set. Compare the terms, interest rates, and installments offered by different lenders. Also, keep an eye on the benefits such as repayment holidays and term extensions.

You should always deal directly with the banks or private lenders to get the best offers. The brokers charge a hefty fee for their services and often hide important information from the borrowers. You can use the online calculators to get the installments, overall cost, and total interest to assess the affordability.

Look for the Additional Charges

Lower interest rates do not always mean the new loan will reduce the current loan's overall cost. You may end up paying more than the original amount because of some hidden fees and charges. Many lenders hide these costs between the lines to make their offer sound too generous.

You should read the loan documents carefully to find these charges. Add them to the overall cost of the loan before signing the papers. Also, make sure the foreclosure charges are also added to the overall cost of the present loan.

Apply for the Loan

You now have the right loan that aligns with your financial goals. It is time to start the application process by filling the required forms. Many private lenders offer online home and personal loans in Ireland for bad credit history where the application is completed within a few minutes.

The traditional process can take a couple of days and visits to the lender’s office. They might ask you for documents to complete your portfolio. Keep the proof of income, credit information, debt statements, and proof of assets ready to speed up the process.

Prepare for Home Appraiser

Lenders will assign their representative to appraise your house. They will inspect the house to put a value on it. Based on it, the lender will offer you a loan amount and interest rate.

They will also, conduct a title search for the house. It is recommended to have each document ready in advance to make the job easy for the lenders. Also, it will help you to get a better deal faster.

Verification of Documents

The underwriters then start their job of verifying different documents and your financial information. They will also double-check your creditworthiness as it is one of the critical factors to determine affordability. Any undisclosed negative marker on the credit history will lead to the application rejection.

You must verify the credit history at least a month before applying for the loan. There might be some error on the credit history that can cause trouble to the loan application. Also, you should have the property details ready for the underwriters to help them a little.

Close the Loan

After the approval, the lenders will ask you to lock the rates and terms for the loan. This could be the most frustrating time for the homeowners as it sometimes stretches for months. The lawyers are responsible for settling the present loan and freeing the property from the lender.

The money you spent on the application and closing may not be redeemed. The lawyers will charge you for their service regardless of the decision of the present lender.

To sum up, refinancing is a smart option to reduce the overall cost of a house mortgage. The installments are cut to a reasonable level based on your current credit portfolio. However, time and cost are not always worth the trouble.

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Created on Jan 13th 2021 09:07. Viewed 311 times.

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