What Is Refinancing a Home?

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To refinance a home, visit a mortgage broker, provide information on income and credit scores, ask for a quote, and make sure the closing costs are reasonable. Refinance a home if your economic situation changes in order to save money with advice from a mortgage specialist in this free video on home financing.

Part of the Video Series: Real Estate Financing
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Video Transcript

Hi my name is Stetson Lowe and in this clip we're going to be talking about what refinancing a home is. As a mortgage professional this is right up my alley obviously. And when you purchase a home you get a mortgage secured to the property and should your circumstances change and you need to access some of the equity in your home or lower your interest rate, maybe you got in initially as a first time home buyer with a little higher rate because your risk level was higher and you had a smaller down payment, maybe your equity is grown now and you'd like to use some of it to consolidate some other medical bills or car loans or credit cards. All these are good reasons to refinance your home. And so what you would do is go and visit a mortgage professional and talk to him about your options based on your current income level, credit score, equity in your home and you talk to him about if you'd want a fixed rate, a 30 year term, a 20 year term, a 15 year term or a 10 year term. Or you can opt for a variable rate mortgage which offers a little bit lower rate but you have the chance of it going up and down following the market trends. Once you've decided on what type of loan you'd like, then you'd ask him for a quote and talk to him about what terms would be acceptable to you as far as interest rate and amortization of the loan. Once you've decided on these and you've seen the quote from the mortgage professional, it's a good idea to negotiate with him on the closing costs and make sure you're paying fair and equitable closing costs and you're not being overcharged. There are hard costs associated with every loan such as appraisal, title insurance, origination fees and sometimes broker fees and underwriting fees with the new lenders. And these fees are pretty much fixed but sometimes the broker or bank does have a little leeway on what they can do for those fees and adjust them to fit your needs and what you're willing to pay. Once you've accepted the terms, you can lock in the loan, order the appraisal and get the loan all into submission for underwriting. It's typically about 7 to 14 days in underwriting before you'll be signing at the title company and securing your new loan against your property.

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