Applying for your refinance loan: What you need to know
Apr 30, 2023
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Are you considering refinancing your home? It can be a smart move if you want to lower your monthly mortgage payments or take advantage of lower interest rates. However, the refinancing process can be daunting, especially if it's your first time. That's why Hitch is here to guide you through the application process and help you get the best deal possible.
Before you apply for a refinance loan, there are a few things you need to know. First, you'll need to gather some information about your current mortgage, such as your remaining balance, interest rate, and monthly payment. You'll also need to provide information about your income, employment status, and credit score.
Once you have this information, you can start shopping around for lenders and comparing their offers. Make sure to look at the interest rates, fees, and closing costs to find the best deal for you. Don't be afraid to negotiate with lenders to get a better rate or lower fees.
When you've found the right lender, it's time to submit your application. You'll need to provide documentation such as pay stubs, tax returns, and bank statements to verify your income and assets. Your lender will also order an appraisal of your home to determine its value.
After you've submitted your application, the lender will review it and make a decision. If you're approved, you'll receive a loan estimate that outlines the terms of your new loan, including the interest rate, fees, and closing costs.
Once you've accepted the loan estimate, the lender will schedule a closing where you'll sign the paperwork and finalize the refinance. After the closing, you'll start making payments on your new loan.
What documents and information do you need to provide when applying for a refinance loan?
In order to apply for a refinance loan, you must provide your lender with various documents to validate your employment background, financial credibility, and overall financial status. If you are applying with a co-borrower, such as your spouse, they will also be required to submit the same documents. Here is a list of documents that you should be prepared to provide:
- Proof of income
- Tax returns
- Bank statements
- Evaluation of credit score
- Evaluation of debt-to-income ratio
During the refinance loan application process, your lender may request additional documentation based on your specific circumstances and the type of mortgage you're seeking. You'll be asked to provide information about your employment history and financial background, and your credit report will be pulled with your permission. It's crucial to take your time and fill out the application accurately and completely. Failure to disclose any credit issues or withhold requested documents will only slow down the process and potentially hinder your chances of approval, so full disclosure is key to a successful refinance application.
Securing your interest rate
Securing your interest rate refers to the process of locking in a specific interest rate on your mortgage loan for a certain period of time. This helps protect you from potential interest rate increases during the application process and provides you with a set interest rate for the life of your loan. Locking in your interest rate typically occurs after you’ve completed the application process, but before your loan is funded. The length of time you can lock in your rate can vary depending on the lender and the type of loan.
After you've submitted your application, the lender will review it and make a decision. If you're approved, you'll receive a loan estimate that outlines the terms of your new loan, including the interest rate, fees, and closing costs.
Once you've accepted the loan estimate, the lender will schedule a closing where you'll sign the paperwork and finalize the refinance. After the closing, you'll start making payments on your new loan.
At Hitch, we understand that the refinancing process can be confusing and overwhelming. That's why we're here to help you every step of the way. Our easy-to-use platform allows you to compare lenders and offers, and our knowledgeable team is available to answer your questions and provide guidance. Let us help you save money and achieve your financial goals by refinancing your home.
At Hitch, we understand that the refinancing process can be confusing and overwhelming. That's why we're here to help you every step of the way. Our easy-to-use platform allows you to compare lenders and offers, and our knowledgeable team is available to answer your questions and provide guidance. Let us help you save money and achieve your financial goals by refinancing your home.
Hitch, Inc. NMLS #2383367 #2383367
2158 NW Toussaint Drive. Bend, Oregon 97703
1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.
2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.
3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.
4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.
5. The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.