What Does it Mean to Refinance?
Refinancing means replacing an existing loan with a new one. Before you refinance a home, it’s important to understand the process, to know what questions to ask, to research refinancing options, and to understand how refinancing would benefit you. At Loan Allies, we will help and inform you through each of these steps in the process.
No cost and low cost refinance options are available.
Why Do People Refinance?
Refinancing is a great tool that helps homeowners pursue goals and improve their finances. Refinancing can be done anytime during the life of your loan, so don’t hesitate to research your options.
Lower Rates and Monthly Payments
If your interest rate is higher than the average market rate, refinancing might be a good option for you. A lower interest rate would decrease your monthly payment.
Switch Adjustable Rate Mortgage to Fixed Rate
An adjustable rate mortgage loan can be a great tool for first time home buyers, but over time, it could cost more. Switching to a fixed rate mortgage can alleviate stress and uncertainty, since your interest rate will be locked.
Switch Interest-Only to Fully-Amortizing
An interest-only loan can help keep your payments low in the beginning, but you aren’t paying down your principal balance. Refinancing can help you start paying off your loan, often without a drastic change in payments.
Reduce Your Loan Term
You can pay off your home faster and score an exceptionally low credit score! 25/20/15 and 10 years available
Consolidate High-Interest Debt
Enjoy the freedom of having a single bill per month by consolidating your debt into a home equity loan. You can use the cash from the loan to pay off high interest debt, saving you money in the long term.
Using home equity to improve your home is a great way to make your money work for you. Whether you need a new deck, want to install new flooring, or you’re ready to build that dream kitchen you’ve always wanted, refinancing can get you where you want to be.
Leveraging your home equity to purchase an investment property is another great way to make your money work for you. Whether you want to purchase a retirement home, a beach house, or a rental, refinancing can help you achieve your goal.
Remove MIP ( Mortgage Insurance Premium)
If you purchased your home with a FHA loan and less than 10% down, you’re paying MIP. If you have at least 10% in home equity, you can refinance to remove that extra fee you’re paying on a monthly basis.
What Documents Do I Need to Refinance?
*Required docs doesn’t have to be a pdf can be written as content
• Social Security card
• SSA-89 (authorization to release SSN verification) if applicable
• Pay stubs, W-2s, or other proof of income
• Bank statements
• Proof of assets
• Proof of earnest money
• Credit history
• Award letter (SSI, child support, welfare, alimony) if applicable
• Retirement/investment income if applicable
• Employment history
• Credit explanation letter if applicable
• Bankruptcy information if applicable
(for owned properties)
- Most recent mortgage statement
- Proof of homeowner’s insurance
- Property taxes documentation
Depending on your employment situation and type, you may also be asked for further documentation.