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Refinancing Your Home

3/26/2020

With mortgage rates at historic lows, you might be one of many Americans who could benefit from refinancing your home.

About 3 million borrowers could save at least $200 a month by refinancing. Locking in a better rate on your loan could also mean saving thousands of dollars in interest over the life of your mortgage and building equity in your home more quickly. 

When considering a refinance, you want to understand your break-even point. That means weighing the costs of refinancing against how much you’ll save each month to know when you will recoup costs over the length of your new loan. For help, contact a mortgage originator who can provide more details on the cost versus savings. 

Application Process

When you’ve decided you want to refinance, your first step is the application. 

Thanks to online applications, you can get started from home, anytime – day or night. 

As part of your application, your lender will request a copy of your credit report. You may be asked to cover the cost of obtaining that report. 

Additional documentation will be requested to verify the information on your application. You'll need

  • Copies of previous two years' W-2 forms
  • Copies of 30 days’ worth of your most-recent pay stubs 
  • Two months' worth of the most recent statements for checking and savings accounts
  • Copy of current homeowners insurance policy
  • Copy of your current mortgage statement
  • Payment method for the appraisal and credit report
  • Social Security numbers of all applicants

Most lenders will accept electronic copies of these documents via a secure email. Or, if you prefer, you can drop off the copies or send by postal mail. 

Approval

When you refinance, you close your existing mortgage and create a new one. The approval process to refinance is similar to the process of obtaining your original loan.

The lender will consider your income and debt, credit score, and other factors affecting your financial situation.

Your new interest rate will be based primarily on your current equity and credit score.

Closing 

From start to finish, your refinance will take a few weeks to finalize. In addition to verifying information on your application, services like an appraisal and title search must be completed before the closing date can be set. 

At closing, you’ll review the terms of your refinance and the documents needed to complete your loan. If you’re married, your spouse may be required to sign mortgage documents, even if they are not on the loan. Be sure to ask who will need to sign and what you’ll need to bring to the appointment. 

Once all the papers are signed, you’ll have a period of three days, called a right to rescission, during which you can decide to cancel the loan. This three-day-waiting period is required by federal regulation and unfortunately cannot be waived. After your rescission period is over, the funds from your loan will be disbursed according to the instructions included in your loan documents.  

OUCU’s Mortgage Team 

If you’re considering a refinance let OUCU help you weigh your options and find the loan that’s right for you. We offer a great combination of online mortgage tools and personal assistance to help you every step of the way. Find out more or schedule a phone appointment today. 



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