The Refinance Process

Collect Personal Information

The first step in the refinance process is for you to gather your income and asset documentation. In order to complete the full application online, you will need to collect information about your current mortgage, your employment history, assets and debts. You will need addresses and phone numbers for every employer you have had in the past two years. You will also need to gather account numbers and balances for all assets and liabilities for all borrowers. This information will be downloaded to our database system using our secure server thereby protecting your security.

Apply Online

Once you have collected your personal information, you can complete the entire application process online from the comfort of your home at any time, day or night. Once your online application is received, your file will be reviewed by an experienced mortgage professional to determine the most effective program for your situation. You will be contacted by your mortgage professional to discuss your mortgage options and preferences.

While conventional loans can be submitted without proof of income and assets, most other loan programs require income and asset documentation before underwriting can take place. This may include copies of your most recent pay stubs, two most recent bank statements as well as your W2 forms from all employers for the previous two tax years.

Once your loan package is ready for submission, it will be forwarded to the lender offering the best interest rates and fees for the program you desire. The lender then underwrites your file and notifies us within 48-72 hours. While most loans are approved subject to additional conditions, some loans are declined due to credit or employment history or high debt to income levels. In such a case, you will be notified by your loan professional before your loan is resubmitted to another lender for consideration.

Approval / Additional Information

Once your loan is approved, the lender will notify your loan professional as to any change in terms (i.e. loan program, term or interest rate) and let them know what additional conditions are required before they can prepare the loan documents. Standard conditions include verifications of employment and assets, an earnest money agreement (real estate contract), appraisal, preliminary title report, homeowners insurance binder, as well as letters of explanation regarding changes in employment, late credit payments and other situations.

Verifications

Most loan programs require verifications of rental history, employment, and assets (such as investment and banking accounts) in order to certify that the information that you represented is accurate. Once your loan is approved, your loan professional will send verifications out to your employers, banks, and current mortgage company.

Title Insurance / Escrow

Once your loan has been approved, your loan professional will open an account with a title insurance/escrow company who will coordinate your transaction. This company will order payoff statements for any current mortgages on the property as well as conduct a title search to ensure that the title is not "clouded" by liens which could supersede the lender’s interest in the property. Be aware that a title insurance policy for a refinance is much more costly than when purchasing a home. This is due to the fact that you are now acting as the buyer and the seller of the property, therefore paying the entire fee.

Appraisal

The next step in the refinance process is to have the home appraised. While you may have a good idea of what your home is worth, an appraisal will give you the fair market value of the home. This is extremely important when refinancing because loan to value ratios are extremely important. If your purpose for refinancing is to take some cash out of your property, you will be limited to a loan to value ratio of 75% with some lenders and 80% with others. For those simply looking to lower their interest rate and payment, most conventional loans allow your new loan to be as high as 90% of the appraised value although a few lenders do allow loan to value ratios as high as 95%.

Before the appraisal is ordered, you will need to submit a check to your loan professional to cover the cost of the appraisal. Typically, the cost for an appraisal for refinancing purposes is $350. Some loans will only require a limited, drive by appraisal which run between $250 - $350.

Home Owner’s Insurance

You will also need to provide your loan professional with the name and phone number of the insurance agent providing your home owner’s coverage. Your insurance agent will then issue an insurance binder with the new lender as beneficiary.

Submit Conditions

Once all of the outstanding conditions that the lender has requested have been received, they will be submitted to the underwriter for approval. The final underwriting process usually takes 48 hours.

Loan Document Preparation

Once the underwriter has reviewed your file and signed off on all conditions, your loan is given authorization to have the loan documents drawn. This usually takes 24-48 hours. Once the loan documents are prepared, the lender forwards the documents to the title & escrow company to arrange a signing appointment.

Signing

Once the title & escrow company receives your loan documents, they will review them and work up the final figures. They will then contact you to schedule a signing appointment and tell you the exact amount of money you will need to bring to closing (if applicable) or the estimated amount you will receive after closing. At your signing appointment you will need to bring a photo ID, a cashiers check for the amount needed to close, and any additional documents that you were asked to bring to the closing. This may include updated pay stubs, letters of explanation as well as any other original document bearing your live signature.

Signings usually last between 30 minutes to an hour for refinance loans, so be sure to arrange daycare and plan your schedule accordingly. Before you leave the signing appointment, you will receive a complete package including copies of all of the documents you signed at the appointment.

Once you have signed all of the loan documents and given the escrow officer the cashier’s check and outstanding conditions, the escrow officer will repackage your loan documents and return them to the lender.

Funding

Once the lender receives your loan package, they will review the documents to ensure that all were signed correctly. They will also review the file to ensure that all conditions have been met. Once they are satisfied that all conditions have been met, they give the loan final approval and order the funds to be wired to the title/escrow company.

With refinance transactions, the government requires a three day right of revision period from the time you sign your loan papers, to allow you time to consider the final transaction. That means that if you sign loan papers on Monday, your loan can’t actually record and fund until Friday. If for any reason you are dissatisfied with the transaction after studying the final figures, you can cancel the transaction during the three days following your signing.

Once the title/escrow company receives the funds from the new lender they will order funds to be transferred to your previous mortgage company to payoff your existing loans and record the transaction with the county thereby completing the refinance process.