How do I refinance

The first step to refinancing is to write a list of what your needs really are. Are you in need of cash, lowering your payments, or want to buy a car etc.

Next you will want to contact a reputable mortgage broker who can listen to your needs and present you with different mortgage programs that will fit your plans and help you achieve your goals..

There are two types of refinances - rate and term, and cash-out.

It is wise to start with your current lender as a benchmark and then get some quotes from mortgage brokers and compare.

Once you have determined the purpose of your refinance, for lower payments or cash out the equity in your home, contact a loan officer to see your options and get a free quote. There are too many loan programs available for you to go it alone. The average homeowners are not familiar with the options available to them. A mortgage broker can often help to achieve their refinance purposes.

Most likely you will need to have an appraisal done in order to refinance your home, especially if you are trying to do a cash-out refinance. The appraisal will give the lender and underwriter an estimate as to the value of your home and help to determine how much the lender will allow you to borrow. The appraisal is only an estimate by the appraiser as to the approximate value of your home. It by no way means your home can or will sell for the appraised value. You may be able to sell your home for a much higher or lower value than what the appraised value comes in at. Usually, the lender or mortgage broker will order an appraisal after you have been pre-approved. The appraisal may be just a drive by appraisal or it may be a full interior inspection appraisal. It is very important during the refinance process to try and set the appraisal appointment up with the appraiser as soon as possible to make sure your rate lock does not expire.

Don't focus strictly on your rate or strictly on your closing costs. You need to obtain the best combination of the two. Ensure you receive a low rate and pay reasonable closing costs.

If your mortgage payment or interest rate is going to adjust, it is generally best to refinance before the date of the first adjustment.

» DISCLAIMER: The information contained in this article on 'How do I refinance' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.