What Happens When You Refinance Your Home?

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When refinancing a home, fill out an application, provide income documentation, have the home appraised, and wait for the bank to approve or reject the refinancing loan. Learn how closing costs are generally rolled in to a refinancing loan with information from a mortgage broker in this free video on home loans.

Part of the Video Series: Home Equity Loans & Foreclosures
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Video Transcript

Hi, my name is Matt McKillen, I'm with Innovative Financial group. The question posed to me is what happens when you refinance your home loan? First off, the process is very similar to when you purchased your home, you fill out a loan application with a bank or a mortgage broker, they pull your credit, then at that point, what their going to do is ask you to provide income documentation, that's usually the last thirty days worth of pay stubs, maybe the last two years W-2's, if you're salaried, or if you're self employed, maybe the last two prior years of your tax returns, all pages. At that point, if the income checks out, what will happen is the lender or the broker will coordinate a new appraisal on your home, so they will send an appraiser back out to your house, just like when you purchased your home, to get a better idea of what the actual market value of the property is, based on sales in your neighborhood the last three to six months. Once they receive that appraisal back, they submit everything into an underwriter, for the funding bank, the underwriter will sign off on everything and if the loan's approved, you will then go to closing at generally a title company and they'll take the new loan, pay your old loan off, if you're taking cash out, you'll receive a check for the difference, and nine times out of ten, they'll roll all of your closing costs into the new mortgage. So, that's basically the steps to refinancing your home, it's very similar to when you purchased your home. I think the key factor that they're more concerned with though, on a refinance is what is your home worth now? Again, my name is Matt McKillen, and I'm with Innovative Financial Group.

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