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4 things you should know if you're thinking of refinancing your mortgage. Are you wondering if you should refinance your mortgage? Here are four things you should know!
With over 16 years of experience as a loan officer, these are four of the most common things that surprise people when considering refinancing their homes. Understanding what to expect during the refinance process helps to take the surprise out of managing your mortgage and allows you to better evaluate if refinancing is right for you.
Here are some common questions with regard to refinancing.
A lot of people are always shocked that when it's time to estimate their payoff, and/or they're getting their loan disclosures, so many times it's like wait a minute, this is not what I owe on my mortgage.
You pay a mortgage in arrears which means that you pay March 1st for your interest in February, as an example.
So your payoff is always your balance, that's what you see on your statement, and/or your credit rate, plus days of interest.
So my trick is I find that if you add a monthly payment to the balance that you see, that is usually very, very close to what your payoff's gonna be.
So that does throw a lot of people off.
Another things that throws a lot of people off is that if you have an existing escrow account and you're going to set up a new escrow account, you typically have to set up an entirely new escrow account and then your current is then refunded to you about 45 days after that lender is paid off.
So it does have to be collected again.
That's another big question that we get a lot with refinances.
A lot of other people ask, do you have to appraise my property again?
I just did it last year.
Well, guess what?
Most appraisals are good for four months.
One, two, three, four months.
So most of the time, if your appraisal is more than four months old, which it's likely to be, if you're financing the home again, then you will need to get a new appraisal.
Another common question.
Why do we need to do title work when I have already owned the home and I've owned the home for 50 years, 10 years, two years, whatever, it doesn't matter?
Each and every time a new mortgage loan is done, the lender wants to know that the title is clear and free of any unsuspecting or unknowing liens.
They wanna know what is liened against that property. And they also wanna make sure that you, as a borrower, there's no judgements that have been filed against you because that could cause you can issue with your mortgage financing.
So yes, you need title work and research done every single time.
The lender does the same work every single time.
The title company does the same work every single time.
The appraiser does the same work every single time.
The home insurance company does the same work every single time.
As does the underwriter, as does the processor, as does the 15 other people behind the scenes working on your loan.
Everything is done over again exactly as it was done last time.
So there's not a lot of ways that you get breaks because everything does have to still be verified.
Your income, your assets, oh my gosh, there's so much to talk about.
It's hard to condense it into one video. So please let me know if you like this video.
I have so much more that I wanna share. I'll be dropping more videos every Tuesday and Saturday and I will try to reign it in because this one was kind of all over the place but I get so excited about this and I want everybody to understand
because there's so much confusion and unknown when it comes to mortgage financing.
So I look forward to shedding that light in there to ripping those curtains open and let you see behind the scenes.
Thank you so much.
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Thank you so much for your support and your feedback.
Every year an average of 21 million people apply for mortgages in the US, and only around 7 million close. I'm on a mission is to change that by spreading mortgage education. Sign up for my newsletter to be a part of my Mortgage Peace Movement!