If you remember our recent article discussing homeowner’s and their regrets on not completing a refinance on their mortgage, then it might be a good time to dive into what a refinance is and how you go about the process.
What is a refinance?
A mortgage refinance replaces your current home loan with a new one – usually this is done to reduce the interest rate, cut monthly payments, tap into the home’s equity, rid of FHA mortgage insurance, or switch from an adjustable-rate to a fixed-rate loan.
How do you start a refinance?
Just like signing for the original loan, you’ll have to qualify for a refinance, file an application, go through the underwriting process, and go to closing – just like you did when you bought the home originally.
Work with same lender or new lender?
If you’re curious how a refinance might look for you, check out NerdWallet’s mortgage refinance calculator before you talk with a lender. Seeing the cost through a calculator might help you determine which lender might offer you the best deal on a refinance.
Mentioned in our previous article on refinancing, many homeowners incorrectly believe that they have to refinance with their current lender, which isn’t true. Like all of our guides on shopping for a mortgage, the same applies for a refinance. Shop, compare, and find the best lender for you.
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