One of the most common questions asked during our Annual Mortgage Review Process, is ” Does it make sense to refinance right now”? The answer to that questions is, it depends…
When does a refinance make sense?
Here's where we start...
It begins with the amount of home equity in the home. If there is more than 20% equity and the current interest rate is above 4.25% or there is currently mortgage insurance on the property, it makes sense to just do a rate and term refinance to remove mortgage insurance and lower the interest rate, effectively, lowering the payment. If it is an FHA loan at a very low interest rate, it may NOT make sense to refinance and consulting a mortgage professional to run the numbers is your best option. Athena Mortgage Group can provide you with a free Property Valuation Report that shows recent sales and other critical factors about the area.
When considering a cash out refinance to pay off credit card debt, make home improvements or pay for college, it makes sense if the return is worth the higher payment.
When it comes to paying off credit card debt, Athena Mortgage Group will calculate the total savings per month vs. the current monthly mortgage payment. In addition, if family budget allows, we can calculate how much you can accelerate paying off the mortgage, by applying the monthly savings towards the principal balance every month. You might be surprised at how much faster you can pay off a mortgage by just adding a few hundred dollars a month towards principal.
When taking cash out for home improvements, it is important to keep in mind improved quality of life and increase in home value. Is it worth the investment? Chances are pretty high that major improvements will increase the value of the home.
When considering a cash out refinance on your home, contact a mortgage professional that can start with a good idea of what the home in Colorado is currently worth through a Property Valuation Report and provide you with all your options and savings over time.
Property Valuation Reports are based on recent recorded data and are not used in the final determination of the value of the home. When taking cash out of a property, the lender always requires an appraisal by an approved Appraisal Management Company.
If you want a free Property Valuation Report or just find out more information and what your options are, Contact the Team at Athena Mortgage Group.
and there are more questions to ask...
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Initial ApplicationThe painless process begins with a one on one meeting, either over the phone or in person, to get as much information about you as possible. You can also fill out an online application if that is more convenient with your schedule. We will discuss credit, income, down payment funds and loan options. By the end of this meeting, we will have a clear plan of action leading to the final goal of home ownership. Book a consultation to get more of your questions answered.
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Credit ReviewIf credit issues become evident, we will take the time to review each account and the steps that need to be taken to improve your credit rating or dispute incorrectly reported information. Book a consultation to get more of your questions answered.
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Collection of DocumentsOnce the loan application interview is complete and the credit report has been acquired, all supporting documents need to be submitted. Below is a general list of what will be needed. Each applicant is different, so additional documents could be needed. This is just a starting point. -1 month of most recent pay stubs -2 months of most current bank statements. All pages for all accounts, including 401K retirement funds, IRA funds, etc… -2 most recent years W-2s -If Self-employed, 2 years most recent tax returns -If recently divorced, Divorce Decree -If filed Bankruptcy in the last 7 years, we need all pages of the BK papers. -If there has been a foreclosure or short sale in the last 7 years, please provide all papers related to the transfer of property. -If receiving a monetary gift for down payment funds, a gift letter and proof of ability to give, from the donor, is required. Book a consultation to get more of your questions answered.
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Loan Is ProcessedOnce the loan application is complete and the supporting documents are received, the loan gets processed for title insurance, homeowner’s insurance, employment verifications, etc… and is then submitted to the lender for underwriting. Typical turn around times are 24 hours in setup and 48 hours in underwriting. However, if any critical documents are missing, this could delay the process. Book a consultation to get more of your questions answered.
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UnderwritingThe loan passes through loan setup and then compliance with most lenders before it goes in line to be put in front of an underwriter. Typically, this will take 24-48 hours. Then it will sit in line for an underwriter for another 24-48 hours. Once the underwriter has reviewed the complete loan package, he/she will either, deny the loan, suspend the loan or provide a list of additional documents that are needed to complete the underwriting decision. Denial: The lender does not feel the loan fits into the guidelines for purchase. Suspension: There is a critical document missing that must be obtained before the underwriter will make a decision. This is not an approval or a denial. Approval: The underwriter feels that the loan meets all guidelines to purchase the loan, pending the additional list of documents is provided. Once the underwriter has issued the additional documents list, we will contact you, the borrower, to provide the missing papers. The sooner these documents are received, the sooner they will go back to the underwriter for review. Book a consultation to get more of your questions answered.
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Home Inspection and AppraisalWhile the loan is in line for underwriting, you will be working with your Realtor to complete the home inspections. We do not order the appraisal until the home inspection is complete and all Home Inspection conditions and Resolutions have been finalized. Once that is complete, the appraisal is ordered. The fee for the appraisal is paid up front and can cost between $650 and $1250. It depends on the type of loan and property being appraised. Book a consultation to get more of your questions answered.
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Final Review and ComplianceThe underwriter will review the documents, including the appraisal and if everything has been provided and cleared. The lender will issue a “Clear to Close”. We are then able to order documents and figures to be sent to the title company for the final Closing Disclosure. Once you receive the first, initial Closing Disclosure, it starts the clock ticking and 3 business days later, you can close. Our goal is to provide the loan closing figures as soon as the appraisal is complete so that you will have time to review the final Closing Disclosure and Closing Documents at least 3 business days prior to closing. This will allow you time to read through all the closing paperwork and order your funds to close. Book a consultation to get more of your questions answered.
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You Made It To ClosingWe pride ourselves on attending each and every closing and are available to answer any questions or issues that might arise. Be sure to bring a legal form of identification, and if funds are required to close, they will need to be in the form of a cashier’s check or a wire. Book a consultation to get more of your questions answered.