With higher interest rates being on everyone’s mind, many people who bought homes in Locust Grove in the past year are also thinking about refinancing it as interest rates decrease.  Refinancing is a great option for homeowners who are looking to lower their monthly mortgage payment and shorten their mortgage term.  Here are some things to know about refinancing homes in Locust Grove…or anywhere!

What does refinancing mean?

Refinancing is really getting a new mortgage with different terms than the one you currently hold.  When you refinance, you can have a lower interest rate, type of loan, and length of loan.  Maybe you want to switch from a thirty year mortgage to a fifteen to save on interest. Perhaps you want to take advantage of a lower interest rate. This can help homeowners save large amounts of money over the life of the loan.  You do not have to use the same lender for your current mortgage for your new one.

How do I refinance my home?

The first step to refinancing homes in Locust Grove is to talk with lenders.  You will want to do some research to find out what types of refinancing programs lenders offer and select one that works best for you. It’s okay to shop around and find the lender that has the best program for you!

The application for a refinancing homes in Locust Grove will look familiar because it’s very similar to all the paperwork you completed to apply for your first mortgage.

Just like when you originally purchased your home, a lender will ask for financial paperwork from you such as

  • Bank statements
  • Paystubs
  • Credit score
  • Assets

After reviewing the documents, the lender can tell you the terms of a refinance.

How long does refinancing my home take?   

Refinancing a home typically takes between thirty and forty five days. As always, it is important to be prompt in returning any paperwork that the lender requests.

Do I need another home appraisal?

Yes!  Just like the appraisal you did to originally get a mortgage for your Locust Grove homes, when you refinance you also need an appraisal.  A home appraisal is an assessment of the home’s value from a third party appraiser.  It makes sure that the mortgage company is not lending out more money than what the home is worth. You will pay for the appraisal.

How much does refinancing a home cost?

Just like your original mortgage, refinancing comes with costs.  You pay for closing costs that are typically two to six percent of your loan.  Your lender can share the fees associated with the refinancing as they are different from lender to lender.   You can pay for these costs up front or roll them into the mortgage.  Do a little research into this and determine which payment is best for you.

Refinancing is a great option for people who are planning on living in their homes in Locust Grove for the long term. A decreased interest rate and/or a shorten borrowing period can really save tens of thousands of dollars in the long term which is money that can be put toward other things.