734.506.6300The Refinancing Process
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The Process
Starting Off
Once you figure out which refinance works best for you, it’s time to contact your loan officer to see what they can offer. After figuring out your options and deciding to move forward, there are a few things you will need to do to get your refinance started. Just like purchasing a home you will need to fill out a full mortgage application. Your mortgage application can be filled out online or taken over the phone by a licensed loan officer. Some of the information that must be provided includes employment history, address history, and personal info such as name, date of birth, and your social security number. Once this information is received a credit report must be pulled. You will be asked to send over documentation that includes, but is not limited to paystubs, W-2’s, homeowner’s insurance declarations and most recent mortgage statement.
The Appraisal
Unlike purchasing a home, there is no purchase agreement, home inspection, or realtors. After providing your application and documentation to your loan officer, your next step will be to order an appraisal if one is needed. In some instances, you may receive an appraisal waiver which allows you to skip the appraisal. This is determined by an automated underwriting system that takes multiple factors based on recently sold homes in the area into consideration.
If you do need an appraisal, your mortgage loan officer will order this for you. The appraiser will then reach out to you to schedule a good day and time for them to come out.
The appraisal is completed by a licensed appraiser. The appraiser will visit the home and will be looking at different factors such as the condition of the home, if any repairs are needed, or if there are any special / uncommon features. There are many ways to appraise a home, but the most common way is by using the sales comparison approach. With this approach, the appraiser will be looking at comparable homes to determine the value. Comparable homes are homes that are nearby, recently purchased, and are similar in age, size, design, etc. The appraiser will go through and take photos of your home inside and out. The cleanliness of your home does not affect the appraised value in any way.
Underwriting
Appraisals can sometimes take over a week to receive back after ordering them. There may be times where you are just playing the waiting game and there is nothing you can do on your end. While waiting for the appraisal to come back, your file may be submitted to underwriting for initial review if your loan officer has all the documentation from you that they need. It is very important that you have good communication with your loan officer and get them all the documentation that they request. The sooner you reply, the sooner you can close.
After the initial submission your loan will either be approved, conditionally approved, or denied. If your loan is conditionally approved, that usually means underwriting just needs more documentation, clarification or waiting on an appraisal or title work. Once everything is received your file will be resubmitted to underwriting.
Clear to Close
Once your loan receives an approval from underwriting, it will then be submitted for a clear to close. This is where underwriting does its final review and approves your loan to close. This means that you have met all the requirements and qualifications to refinance your home. Your loan officer will be reaching out to you to schedule a good day, time, and location for you to close. The closing usually takes place at your lender’s office or your home.