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The Refinance Process
When refinancing a home, the loan process generally consists of the following 10 steps:
1. Collect Personal Information
The first step in the loan process is for you to gather your income and asset documentation. We can complete much of the application for you, but in order to do this, you will need to forward to us (via fax, email, US mail, or in person) documentation verifying your income and assets. We will need personal information (such as birth date, SSN, current home address, # of dependants, marital status, etc.) and addresses and phone numbers for employers that you have had in the past 2 years. We will also need your most recent 3 months asset account statements (checking, savings, mutual funds, insurance, 401K, IRA, etc.).
2. Apply
Once you have collected and your personal information, you can complete the entire application process by phone, fax, or 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 us and we will contact you to discuss your mortgage options and preferences. Once the application is complete and all documentation has been obtained, your file will be submitted to underwriting (usually an automated system) for credit approval. If the underwriting is automated, we will have an answer within an hour; if the underwriting needs to be done manually, we will generally have an answer within 1-3 days. 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, we will restructure the loan (generally by reducing the loan amount/payment) and resubmit until we get an approval. We will then contact you to discuss your alternative loan options. Click here to apply online. Return to top
Once you have collected and your personal information, you can complete the entire application process by phone, fax, or 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 us and we will contact you to discuss your mortgage options and preferences.
Once the application is complete and all documentation has been obtained, your file will be submitted to underwriting (usually an automated system) for credit approval. If the underwriting is automated, we will have an answer within an hour; if the underwriting needs to be done manually, we will generally have an answer within 1-3 days. 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, we will restructure the loan (generally by reducing the loan amount/payment) and resubmit until we get an approval. We will then contact you to discuss your alternative loan options. Click here to apply online.
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3. Approval / Additional Information
Once your loan is approved, we will let you know what additional conditions are required before we can prepare your final loan documents. Standard conditions include verifications of employment and assets, appraisal, preliminary title report, homeowners insurance binder, as well as letters of explanation regarding changes in employment, late credit payments and other situations. Return to top
Once your loan is approved, we will let you know what additional conditions are required before we can prepare your final loan documents. Standard conditions include verifications of employment and assets, appraisal, preliminary title report, homeowners insurance binder, as well as letters of explanation regarding changes in employment, late credit payments and other situations.
4. Title Insurance / Escrow
Once your rate is locked, we will specify a title company (to provide the title searches and title insurance) and an escrow company (to coordinate the transaction, setup the trust accounts, and clear liens on title). The title company will perform a title search to ensure that there are no outstanding liens attached to the property. Once they verify that the property can be transferred without incident, they issue a title insurance policy ensuring you against having the property attached by a previous lien holder. Return to top
Once your rate is locked, we will specify a title company (to provide the title searches and title insurance) and an escrow company (to coordinate the transaction, setup the trust accounts, and clear liens on title). The title company will perform a title search to ensure that there are no outstanding liens attached to the property. Once they verify that the property can be transferred without incident, they issue a title insurance policy ensuring you against having the property attached by a previous lien holder.
5. Appraisal
Once you have lock your interest rate, the lender will require that your home be appraised. Appraisals are used to determine the true value of the home based on the recent sales prices of comparable homes in the area. They do not typically assess the condition of the property, only the value . Before the appraisal can be ordered, you will be asked to provide a deposit (generally via credit card) to cover the cost of the appraisal. Typically, the cost for a full appraisal is $450. Some loans will only require a limited, drive by appraisal which run between $250 - $350. This is the only time that you will experience a cost before closing and this deposit will be credited back to you at closing. Return to top
Once you have lock your interest rate, the lender will require that your home be appraised. Appraisals are used to determine the true value of the home based on the recent sales prices of comparable homes in the area. They do not typically assess the condition of the property, only the value . Before the appraisal can be ordered, you will be asked to provide a deposit (generally via credit card) to cover the cost of the appraisal. Typically, the cost for a full appraisal is $450. Some loans will only require a limited, drive by appraisal which run between $250 - $350. This is the only time that you will experience a cost before closing and this deposit will be credited back to you at closing.
6. Home Owner’s Insurance
If you are refinancing a house or a town-home (not a condominium), you will need to contact your loan processor with the name and phone number of your insurance agent. Your insurance agent will then issue an insurance binder with the mortgage companies name as beneficiary. Depending on when your annual insurance premium is due, we will be collecting a 2-12 month reserve at closing. Return to top
If you are refinancing a house or a town-home (not a condominium), you will need to contact your loan processor with the name and phone number of your insurance agent. Your insurance agent will then issue an insurance binder with the mortgage companies name as beneficiary. Depending on when your annual insurance premium is due, we will be collecting a 2-12 month reserve at closing.
7. Submit Conditions
Once we have received all of the outstanding conditions that the lender has requested (e.g. appraisal, title, etc.), those items are submitted to underwriting for final loan approval. The final underwriting process generally takes 24-48 hours. Return to top
Once we have received all of the outstanding conditions that the lender has requested (e.g. appraisal, title, etc.), those items are submitted to underwriting for final loan approval. The final underwriting process generally takes 24-48 hours.
8. 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 by your Processor (this is usually done within 24 hours). Once the loan documents are drawn, your Processor forwards the documents to the escrow company. Return to top
Once the underwriter has reviewed your file and signed off on all conditions, your loan is given authorization to have the loan documents drawn by your Processor (this is usually done within 24 hours). Once the loan documents are drawn, your Processor forwards the documents to the escrow company.
9. 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 had been asked to bring to 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. Return to top
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 had been asked to bring to 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.
10. 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. Refinance transactions for primary residences, the government requires a 3 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 won’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 this three day period 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. Return to top
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. Refinance transactions for primary residences, the government requires a 3 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 won’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 this three day period 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.
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