Mortgage Refinance Guide

Review our detailed mortgage refinance checklist to understand the documents and information lenders request when you refinance. The documents required for a refinance are different than for a home purchase loan and include your current mortgage statement and property tax bill.  Getting your paperwork in order before you apply for your refinance can help the process go more smoothly.

Understand the milestones in the refinance process from determining how much equity you have in your home, to the right of rescission period and closing. Learn how long it usually takes to refinance your mortgage and the factors that influence process timing.  Our Refinance Timeline is interactive and enables you to review how long each step in the process takes.

Understand if it makes financial sense to refinance your mortgage to lower your interest rate and monthly payment. Learn how much you should lower your mortgage rate by and how the loan program you choose factors into the decision to refinance.  Determine how long it should take to recover closing costs when you refinance.  Review an example that shows the financial benefits of refinancing into a lower mortgage rate.

Understand the financial advantages of refinancing to your shorten the length of your mortgage. Learn how reducing your loan term can lower your mortgage rate and total interest expense.  Review an example that shows how a shorter mortgage saves you money in the long run and why reducing the length of your mortgage is beneficial even if your monthly payment does not go down by refinancing.

Learn how changing your mortgage program when you refinance can reduce your monthly payment and increase your financial certainty.  Review an informative example that shows how refinancing an adjustable rate mortgage (ARM) into a fixed rate mortgage can lower your payment and total interest expense while eliminating the risk that your mortgage rate and payment increase in the future.

Learn how a cash out refinance works and how you can cost-effectively access the equity in your home.  Understand how you can spend the proceeds from a cash out refinance and how the mortgage rate and other loan terms compare to a standard refinance.  Determine the maximum proceeds you can take out and review a helpful example of a cash out refinance.

Learn if you should use a cash out refinance or a separate loan to finance a major purchase or to pay down debt.  Review an example that shows why a separate loan may make more financial sense than a cash out refinance because you usually pay less total interest expense.  Understand how your mortgage rate and loan length affects your monthly debt and interest cost.

Understand how a debt consolidation refinance enables you to use the equity in your home to pay-off high cost debt and lower your total monthly loan payments and average interest rate. Learn how a debt consolidation refinance is different than a standard refinance including loan terms, maximum loan-to-value (LTV) ratio and other qualification requirements.  Review an example of a debt consolidation refinance including the potential monthly savings.

Understand why it is important to consider total interest expense when deciding if you should do a debt consolidation refinance.  Learn how your mortgage rate and loan length impact your total interest expense and why it may not make sense to refinance even if you lower your monthly debt payments.

Understand if you should refinance your mortgage or get a home equity loan.  Learn how to compare the monthly payment, interest cost and total debt payments for a refinance and home equity loan.  Determine the financing option that is right for you based on your personal and financial goals.

Learn how to apply mortgage acceleration after you refinance to shorten the length of your loan and significantly reduce your total interest expense. Understand the financial benefits of combining mortgage acceleration with refinancing even though you continue to make the same monthly payment.

Understand your mortgage refinance lender options including banks, credit unions, mortgage brokers, mortgage banks and private money lenders. Learn why you should compare different types of lenders when you refinance and why there is usually no advantage to refinancing with your existing lender unless they offer the best loan terms.

Understand the benefits of getting pre-approved when you refinance including addressing possible challenges before you submit your refinance application.  Understand how to get pre-approved and the documents lenders may request to pre-approve you for your refinance.

Review a mortgage refinance application including the personal and financial information that lenders require. Understand the additional information and documents that are required when you apply to refinance your mortgage. Determine if lenders can charge you to submit a refinance application.

Learn how to use the Loan Estimate for a mortgage refinance to compare loan terms and choose a lender. Understand the purpose of the Loan Estimate for a refinance including key items such as your interest rate, closing costs and APR and where they are located on the document.

Learn how to compare mortgage refinance proposals to select the loan and lender that are right for you. Understand the types of lenders you should compare, how to request refinance proposals as well as the documents and loan items you should focus on to find the best refinance terms.

Understand how a no cost refinance works including what to look out for to ensure that you are truly not paying any mortgage costs.  Review how the APR can help you determine the amount of costs you are paying, if any.  Learn how the mortgage rate for a no cost refinance is higher than the rate for a standard refinance and how that affects your monthly payment and total interest expense. 

Review a detailed comparison of the three main mortgage programs including how they work and positives and negatives. Compare key program features including risk level, mortgage rate, monthly payment and amortization. Determine the mortgage program that best meets your refinance objectives and if it makes sense to change programs when you refinance.

Determine if you should pay discount points when you refinance your mortgage. Learn how discount points affect your mortgage rate, loan payment and total interest expense over your loan term. Review a helpful example that compares paying discount points to not paying points.

Determine if you should lock your interest rate when you refinance your mortgage including how the lock period impacts your mortgage rate and costs.  Learn when and for how long you should lock your rate when you apply to refinance.  Understand how market conditions affect your decision to lock when you refinance.

Understand the services that a settlement agent provides for a mortgage refinance.  Learn how the settlement agent manages the refinance closing proceeds including the distribution of loan proceeds and loan documents. Determine how the settlement agent for a refinance is usually selected and the approximate cost.

Understand why you need a new title insurance policy when you refinance your mortgage even though you already have a policy.  Learn what information is outlined in the title report or title search for a refinance. Learn the difference between lender and owner title insurance and what type of policy you need when you refinance.

Learn the information contained in the appraisal report for a refinance and how lenders use the appraisal to determine your loan-to-value ratio. The appraisal report is used to make sure you have enough equity in your home to qualify for the refinance.  Understand why the appraisal report is especially important if you are doing a debt consolidation or cash out refinance.

Understand the purpose of the Closing Disclosure for a refinance. Learn how you can use the document to confirm important loan items such as your interest rate and settlement costs prior to closing to make sure that you are not overpaying for your refinance.

Understand why you should compare the Loan Estimate to the Closing Disclosure for a refinance. Comparing these documents before your refinance closes can help you find high closing costs, changes in important loan terms and potentially save you money.  Understand what to do if you find differences between the Loan Estimate and Closing Disclosure for a refinance.

Learn how the three day right of rescission period works for a refinance including how borrowers can use the rescission period to identify mortgage fraud.  Understand when the right of rescission period begins and when you can cancel, or rescind, your loan during the refinance process.  Know the steps you should take if you decide to cancel your refinance.

Understand the key steps to recording, funding and closing a refinance including how the settlement agent manages the process. Review the timeline for a refinance closing including when borrowers sign documents, the transaction is recorded and refinance funds are released to the appropriate parties including the borrower, the borrower's existing bank and third party service providers.