WHAT IS THE REFINANCE PROCESS?Our decision whether to approve your loan application will again be determined by an evaluation of the following.
Do you have enough income to repay the debt?
Will you repay the debt? This assessment will be base on how much you owe, how much you borrow, whether you pay your bills on time, and whether you live within your means.
What are your assets, including the equity in your home?
Based on current market conditions, how much is your home worth? Will the lender be protected if you fail to repay the loan?
Because you are applying for a new loan, you may have to pay many of the same fees associated with the original purchase of your home, including an application fee; title search and title insurance fees; the cost of an appraisal; a loan origination fee; and any discount points, prepayment penalties, and any legal service fees relating to your loan.
Sometimes, a new appraisal will not be necessary. In addition, some of the fees and closing costs may be waived. We offer “no-cost” refinancing, which means that you do not have to pay most of the fees generally required; however, often we will charge a higher interest rate for this type of loan. Sometimes we may offer “no-cost” refinancing or that some, or all, of the refinancing fees and costs can be waived.
This fee covers our cost of processing your loan request.
This fee pays for a professional appraiser to estimate the market value of the property. The appraiser looks at what the home is worth today and how the neighborhood may affect future property value.
We order a credit report on you and any co-borrowers to verify the information you’ve already supplied on your loan application and to see how you’ve handled past debt and credit accounts.
Discount points represent the additional money you can pay at closing. In return, we will provide you with a lower interest rate on your loan. Each point equals 1 percent of the loan amount.
We charge you for fees paid to the company that conducts the closing. You may also want to hire your own attorney to review documents and represent you throughout all stages of the transaction.
This fee covers the our work in evaluating and processing the loan. It usually is expressed as a percentage of the loan.
Depending upon the type of loan you have and other factors, additional expenses you might face include the fee for a Department of Veterans Affairs (VA) loan guarantee, Federal Housing Administration (FHA) mortgage insurance, or private mortgage insurance (MI).
Your existing mortgage may have a prepayment penalty clause. This means that if you pay off your existing mortgage earlier than the terms stated in the contract, you may be required to pay an additional amount, usually a percentage of the outstanding principal, as a penalty. Laws in many states prohibit or limit mortgage prepayment penalties. Check your mortgage documents or ask your lender if your mortgage contains a prepayment penalty and if a prepayment penalty can be enforced in your state.
We may order a new survey of your property to ensure that nothing has changed about the land and physical structures that would affect a future sale.
Title Search and Title Insurance
This charge will cover the cost of examining the public record to confirm your ownership of the property. It also covers the cost of a title insurance policy, which insures a specific amount for any loss caused by a discrepancy in the title to the property. An owner’s title policy protects your ownership interest in the property. You should ask the company carrying your present title insurance policy if it can reissue it at a reissue rate, which may save you money.