Refinance Loans

Determining if a home refinance loan is right can be confusing. That's why we've put together a list of common questions that homeowners have when considering refinancing.

What is Refinancing?
Refinancing is simply getting one loan to pay off another.

What does refinancing cost?
The cost will vary significantly depending on the new rate you choose. Many clients can effectively refinance for "free" if they select a rate where the lender gives them a significant lender credit to cover costs.

What are points?
Points (or discount points) are a way of lowering your interest rate. 

How does the APR differ from the interest rate?
The rate refers to what percentage of your loan you will pay in interest per month, whereas the annual percentage rate (APR) is an adjusted percentage that expresses the yearly cost and also considers certain up-front charges and fees.

What are FRM & ARM?
The interest rate of a Fixed-rate Mortgage (FRM) will not change for the life of the loan. Alternatively, an Adjustable-rate Mortgage (ARM) will be subject to periodical interest rate adjustments based on interest rates around the country.

What is PMI?
PMI stands for Private Mortgage Insurance. Borrowers with less than a 20 percent down payment are usually required to carry this insurance as a means of protecting the lender against default.

Will I need to get an appraisal when I refinance?
Sometimes.  There are many situations where your lender will not need to order an appraisal.  Click the blue GET STARTED NOW button at the bottom of this page and we will help you determine whether you will need an appraisal or not.

Does bad credit exclude me from a refinance loan?
Not exactly. When considering a refinance loan it's important to remember that the better your credit score the better interest rate you may be able to get. So if you don't have perfect credit you can still qualify for a refinance loan but you'll want to make sure that you're lowering the interest rate on your loan enough to make a refinance worth it.

Do I need to have equity in my home to refinance?
It depends on the type of refinance you are trying to do.  Click on the blue GET STARTED NOW button at the bottom of this page and we will walk you thought that. 

Can I get cash from a refinance loan?
Yes, often can. Depending on the type of refinance loan you opt for you can take out cash to use for bills, home repairs or whatever you might need it for.

Can I "lock-in" an interest rate on a refinance loan?
Yes. 

There are many refinancing options available, and the benefits of each are unique. Whether you’re looking to reduce your payments or consolidate your debt, we can help. Call or come in today to get your process moving.

Lowering your Monthly Payment

• There are a few ways to lower your monthly payment, including obtaining a lower interest rate or extending the term of your loan. This is usually the primary reason for obtaining a refinance loan. Whether you're looking to switch from a variable rate to a fixed rate loan or looking to pay less per month a refinance loan can help provide more stability and smaller payments.

Cashing-out Equity

• Many people would like to take advantage of the equity they have built up in their homes. When refinancing, it is possible to accomplish that while still reducing your monthly payments. Accessing the equity in your home is a great way to make some improvements in your life whether that be paying for college, renovating or remodeling your home or even starting a business. For most people their homes are their greatest sources of wealth, so using that to its full advantage can make a big difference.

Consolidating Debt

• Refinancing can be useful in keeping your debt manageable by replacing a number of high-interest loans (such as credit card debt) with a single, lower-interest loan. You can take the cash that you gain from taping the equity in your house and paying off any kind of debt that you might have. Most people will try to pay off high-interest, non-deductible forms of debt such as credit cards or auto loans.

Dropping Private Mortgage Insurance

• Depending on how much equity you have in your home you can refinance your home loan and possibly drop your private mortgage insurance. This can mean a lower overall monthly payment on your mortgage. 

Buy Down your Rate

• By paying points up-front, you can reduce your interest rate. This may or may not be a good option for you. Those who see benefits from paying points up-front are those who plan on being in their homes for a while. A lower interest rate means a lower monthly payment. The longer you pay the lower monthly payment the more sense it makes to pay points up front.

Low-cost Refinancing

• This option can eliminate some or all of the fees associated with refinancing, but also carries a higher interest rate than a standard refinance. It's important to take all aspects of a new loan into consideration before refinancing. Our refinance professionals are ready to help you make the right decision. Let us help you determine of low-cost refinancing is a good fit for you.

When you refinance, certain documents and information will help the process move forward more quickly. Below are listed some of the more common documents needed to refinance. The more information you have on-hand, the faster your refinancing will go.

You are likely to need:
Employment Information

• Most recent month’s pay stubs (originals)
• W-2 forms—past 2 years’ (copies)
• Income tax return information, especially if self-employed—past 2 years’ (copies)

Assets & Obligations Information

• Checking, savings, or stock accounts; 401K information; etc. (copies)
• Current credit score and reports
• Debt data such as credit card or current mortgage information

Insurance Information

• Homeowners insurance (copy, especially of the declarations page)
• Proof of title insurance

People refinance for a number of reasons. You may like to consolidate first and second mortgages, get a lower interest rate, or lower your monthly payment. Perhaps you want to switch from an Adjustable to a Fixed-rate Mortgage, or to stop paying Private Mortgage Insurance (PMI). Maybe you're just looking to cash out some of your equity for home renovations. Refinancing allows you to redefine your mortgage loan to better fit your current needs.

However, there are many things to consider before deciding to refinance your mortgage. With so many options it's important to refinance the right way. At NW Capital Mortgage A Division of American Pacific Mortgage Corporation we’re happy to show you all of your options so you can make the best decision on a refinance loan. If you would like to find out if a refinance is right for you then give us a call today at 360-831-0559 .

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These materials are not from HUD or FHA and were not approved by HUD or a government agency and in some cases a refinance loan might result in higher finance charges over the life of the loan.