FAQs
Frequently Asked Questions
HOME / FAQS
Should I refinance?
Homeowners are typically motivated to refinance to:
- lower their monthly payments,
- convert from an adjustable to fixed rate,
- pay their loan down faster,
- eliminate monthly mortgage insurance payments, or
- take cash out of their property for any one of a number of different reasons.
In some of the above scenarios a borrower’s mortgage payment will go down as a result of a refinance, and in other scenarios a borrower’s payment will go up as a result of a refinance.
If your objective is to reduce your interest rate and payment, you should review your current rate and see how much you can save with a no fee/no point loan or if it makes sense to pay points to reduce your rate further.
If you are converting your adjustable rate into a fixed rate, you may actually see your rate and payment increase in exchange for long-term peace of mind.
If you are using the equity in your home to consolidate debt, your overall loan balance and payment may go up, but you will save monthly because you will eliminate the other monthly obligations that you are paying off, which likely carried higher interest rates.
Your advisor can offer further guidance as to whether any of these options make sense for you.
Can I refinance if my property value is less than what I owe?
Depending on when your loan was originated and certain other criteria, you may be able to refinance your mortgage even if the value of your home is less than what you owe. Before you determine not to move forward with an application for a refinance because you believe your home value may be insufficient, please contact one of our advisers.
Do I need to pay any out-of-pocket costs when I refinance?
With HomeFirst, you may choose to structure your refinance so that you incur no out-of-pocket expenses at closing. Typical third party charges include fees for credit reports, title, escrow, notary, and recording. Other fees include the appraisal fee and lender fees such as processing and underwriting. If you are paying points to lower the rate, the cost of each point that you pay equals 1% of your new loan amount. Aside from the closing fees, there will be prorated pre-paid costs for items such as property taxes, interest, and homeowners’ insurance (if applicable). If you have enough equity in your home, you can add all fees and pre-paid items into your new loan.
What type of documentation do I need to refinance?
Your advisor will walk you through exactly what is needed for your particular situation. Typically, the following documents are required:
- income documentation such as pay stubs covering the most recent 30 days and W-2s for the last two years
- asset documentation such as bank or investment account statements covering the last 60 days
- current loan documentation in the form of your most recent mortgage statement
- insurance documentation in the form of your homeowners’ insurance declarations page
Can I refinance with bad credit?
You do not need excellent credit to qualify for a loan with HomeFirst. As a direct lender, we are able to be apply less rigorous underwriting standards than many traditional banks. For example, we can underwrite down to a mid-FICO score as low as 560 in some cases. We can also consider providing financing for borrowers that have a short sale, foreclosure or bankruptcy in their history. Please contact one of our advisors to learn more.
Does it make sense to refinance to capture a 0.25% move in interest rate?
There is no one-size-fits-all interest rate change that gives everyone a reason to refinance. For example, if you are currently in an adjustable rate looking to get into a long-term fixed loan, it may actually make sense to refinance into a higher rate to put yourself in a better long-term position. If you are looking to consolidate debt, it may also make sense to refinance into a slightly higher rate to eliminate your high-interest credit card debt and decrease your overall monthly outflow. There are also no-cost and low-cost refinance options that can lower your rate and payment with no or minimal investment—which can give you the ability to realize savings with only a modest change in interest rate. If you would like to better evaluate your specific situation, please contact one of our advisors.
How long is the refinance process?
We can close a typical rate and term or cash out refinance in as little as two weeks. However, third party vendors such as appraisal companies can sometimes slow the process. Please contact your advisor to get a better estimate of the expected timeframe for your particular scenario.
How does the loan closing process work?
Depending on the state in which your property is located, you can either sign in your home or at a pre-determined settlement location such as an escrow office or attorney’s office. In the presence of the signing authority, you will review and sign all your loan documents and then present a certified or cashier’s check to pay the closing fees and other applicable closing funds, unless you decided to finance the closing funds into your new loan. Once your loan documents are signed and delivered back to our office, your loan will close in just a few days. If you are pulling cash out of the equity in your home, you will receive your funds 1 to 3 days after your loan closes. For more information about the anticipated closing schedule in your particular situation, please contact one of our advisors.
Can I still refinance if I have a second mortgage?
A second mortgage is usually paid off through a refinance. We can consolidate both loans into one new first mortgage and you will only have one payment each month. If you’d prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance your first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.
Frequently Asked Questions
HOME / FAQS
Should I refinance?
Homeowners are typically motivated to refinance to:
- lower their monthly payments,
- convert from an adjustable to fixed rate,
- pay their loan down faster,
- eliminate monthly mortgage insurance payments, or
- take cash out of their property for any one of a number of different reasons.
In some of the above scenarios a borrower’s mortgage payment will go down as a result of a refinance, and in other scenarios a borrower’s payment will go up as a result of a refinance.
If your objective is to reduce your interest rate and payment, you should review your current rate and see how much you can save with a no fee/no point loan or if it makes sense to pay points to reduce your rate further.
If you are converting your adjustable rate into a fixed rate, you may actually see your rate and payment increase in exchange for long-term peace of mind.
If you are using the equity in your home to consolidate debt, your overall loan balance and payment may go up, but you will save monthly because you will eliminate the other monthly obligations that you are paying off, which likely carried higher interest rates.
Your advisor can offer further guidance as to whether any of these options make sense for you.
Can I refinance if my property value is less than what I owe?
Depending on when your loan was originated and certain other criteria, you may be able to refinance your mortgage even if the value of your home is less than what you owe. Before you determine not to move forward with an application for a refinance because you believe your home value may be insufficient, please contact one of our advisers.
Do I need to pay any out-of-pocket costs when I refinance?
With HomeFirst, you may choose to structure your refinance so that you incur no out-of-pocket expenses at closing. Typical third party charges include fees for credit reports, title, escrow, notary, and recording. Other fees include the appraisal fee and lender fees such as processing and underwriting. If you are paying points to lower the rate, the cost of each point that you pay equals 1% of your new loan amount. Aside from the closing fees, there will be prorated pre-paid costs for items such as property taxes, interest, and homeowners’ insurance (if applicable). If you have enough equity in your home, you can add all fees and pre-paid items into your new loan.
What type of documentation do I need to refinance?
Your advisor will walk you through exactly what is needed for your particular situation. Typically, the following documents are required:
- income documentation such as pay stubs covering the most recent 30 days and W-2s for the last two years
- asset documentation such as bank or investment account statements covering the last 60 days
- current loan documentation in the form of your most recent mortgage statement
- insurance documentation in the form of your homeowners’ insurance declarations page
Can I refinance with bad credit?
You do not need excellent credit to qualify for a loan with HomeFirst. As a direct lender, we are able to be apply less rigorous underwriting standards than many traditional banks. For example, we can underwrite down to a mid-FICO score as low as 560 in some cases. We can also consider providing financing for borrowers that have a short sale, foreclosure or bankruptcy in their history. Please contact one of our advisors to learn more.
Does it make sense to refinance to capture a 0.25% move in interest rate?
There is no one-size-fits-all interest rate change that gives everyone a reason to refinance. For example, if you are currently in an adjustable rate looking to get into a long-term fixed loan, it may actually make sense to refinance into a higher rate to put yourself in a better long-term position. If you are looking to consolidate debt, it may also make sense to refinance into a slightly higher rate to eliminate your high-interest credit card debt and decrease your overall monthly outflow. There are also no-cost and low-cost refinance options that can lower your rate and payment with no or minimal investment—which can give you the ability to realize savings with only a modest change in interest rate. If you would like to better evaluate your specific situation, please contact one of our advisors.
How long is the refinance process?
We can close a typical rate and term or cash out refinance in as little as two weeks. However, third party vendors such as appraisal companies can sometimes slow the process. Please contact your advisor to get a better estimate of the expected timeframe for your particular scenario.
How does the loan closing process work?
Depending on the state in which your property is located, you can either sign in your home or at a pre-determined settlement location such as an escrow office or attorney’s office. In the presence of the signing authority, you will review and sign all your loan documents and then present a certified or cashier’s check to pay the closing fees and other applicable closing funds, unless you decided to finance the closing funds into your new loan. Once your loan documents are signed and delivered back to our office, your loan will close in just a few days. If you are pulling cash out of the equity in your home, you will receive your funds 1 to 3 days after your loan closes. For more information about the anticipated closing schedule in your particular situation, please contact one of our advisors.
Can I still refinance if I have a second mortgage?
A second mortgage is usually paid off through a refinance. We can consolidate both loans into one new first mortgage and you will only have one payment each month. If you’d prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance your first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.