Refinancing Mortgage

In many cases, your home is the most significant single investment you’ll ever make. Often, securing a mortgage is key to making the initial purchase. However, your original loan might not be the best long-term deal, making refinancing the mortgage an attractive option.

Mortgage refinancing lets you accomplish several goals, including lowering your interest rate, reducing your payments, shortening your loan term, and more. If you’re considering mortgage refinancing in Utah, here’s what you need to know.

A refinancing mortgage is a loan product that payoffs your existing mortgage, allowing you to effectively transfer the debt to a different lender or loan arrangement. You’ll often end up with a new principal amount, a fresh interest rate, and an updated payment schedule.

There are several refinancing options available. With rate-and-term refinances, the primary goal is to maintain the current principal while securing a new interest rate and repayment term. When it comes to the term, you may shorten it to pay off the mortgage faster or extend it to reduce your monthly payments.

With cash-out refinancing, you tap into the current equity. That allows you to receive the extra financed amount above the current principal on your existing loan to handle other financial needs, including paying off debt or tackling home improvement expenses.

Generally speaking, it’s possible to refinance nearly any type of home loan. For more specific details, here’s a look at common questions about refinancing various mortgages.

Yes, you can refinance a conventional loan. Often, homeowners who have this type of mortgage refinance into a new conventional mortgage, too. This option is available even if you’d like to cash out or shorten or extend your repayment timeline.

You can refinance a jumbo loan, but the overall process is more complex than refinancing non-jumbo loans. The borrowing standards are often higher if you’re refinancing into a new jumbo loan. However, if you have enough equity to qualify for a non-jumbo loan, the process is similar to other types of refinancing.

Refinancing an adjustable-rate mortgage isn’t just an option; it’s often a smart move. You can transition to a fixed-rate loan, securing a new interest rate that won’t shift over the life of the mortgage. Usually, you’ll want to move forward before your original mortgage undergoes an interest rate adjustment, as that can safeguard you against unexpected increases.

You typically do have the ability to refinance an existing fixed-rate mortgage. This can work whether you want to try and qualify for a lower interest rate, alter your payment timeline, or perform a cash-out refinance.

You have several choices if you’d like to refinance an FHA home loan. Along with transitioning to a conventional loan with another lender, you may be able to go forward with an FHA streamline refinance instead, which involves less credit documentation and underwriting.

As with an FHA mortgage, a VA home loan can be refinanced in several ways. You can explore options through a new lender or use the VA streamline refinance option (known as VA IRRRL) to simplify the process.

Refinancing a mortgage in Utah is far simpler than completing the initial home purchase, though it does include many of the same steps. Typically, you’ll begin by filling out an application, providing details about your property, the current mortgage, income, assets, and debts. During the initial process, a credit check is usually performed, too.

Early on, you’ll also need to provide specific documents. Recent pay stubs, W-2s (or 1099s), and bank statements are standard requirements. Self-employed individuals may need to show other information, including tax returns or billed invoices.

If approved, you’ll get presented with an interest rate that you can lock in, ensuring it won’t change during the underwriting and closing process. During underwriting, your application is carefully examined, and specific details are verified. As the refinancing moves forward, the lender may arrange for an appraisal to ensure the value of your home is appropriate based on the refinance mortgage terms.

After the underwriting and appraisals, it’s time for closing. You’ll review documents to see the final terms for your refinancing mortgage in advance and then go over the information with an appropriate representative before signing. Once the signing is complete, the lender typically sends a lump sum payment to your previous lender, ensuring it’s paid off.

You may want to refinance your mortgage for several reasons. The most common is to secure a lower interest rate, which saves money over the long term. Some borrowers may also want to shorten or extend their repayment terms, allowing them to pay off their mortgage faster or secure a lower payment.

In some cases, refinancing is a way to avoid rate adjustments that occur with an adjustable-rate mortgage. You can get a fixed-rate mortgage instead, giving you some financial stability.

Finally, a cash-out mortgage refinance allows you to secure funds that you can use for various needs – including debt repayment or home improvements – by tapping into any current equity. Often, this is seen as a sound alternative to other forms of financing, as mortgage interest rates are commonly lower than what you find with personal loans or credit cards.

For mortgage refinancing in Utah, Rodrigo Ballon is a certified mortgage lender with more than 17 years of experience in the residential mortgage lending field. You can get competitive rates and options designed to meet your needs, allowing qualified applicants to reduce their interest rates, secure funds for home improvements, and more.

If you’re ready to start with mortgage refinancing in Utah, Rodrigo Ballon is a trusted partner that will assist you throughout the process. Contact us today.