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How to refinance a mortgage

Published On: September 14th, 2022

What is a mortgage refinance?

Refinancing a mortgage involves taking out a new loan, usually with better terms, to pay off an existing loan. This process allows access to your home equity to lower monthly payments, get quick cash or make home improvements.

Refinancing at a lower rate can save you money each month.* In some cases, refinancing can save you hundreds or thousands of dollars in interest payments over the life of your loan.

How to refinance a mortgage

If you haven’t refinanced before, you may be wondering how you go about it. There are many factors to consider during the refinance process. What type of refinance would work best for you depends on your goals. Do you want to remodel your home or take cash out of your home to pay down other debt? Or do you want to pay off your mortgage sooner and save on interest?

Knowing your numbers is important for refinancing. Look at the current interest rate on your loan and interest rate trends when you want to refinance.

The more you know upfront, the better. Talking to an expert is your best bet when it comes to getting all your questions answered. Our loan officers can identify the best route for your specific scenario.

Refinance resources

Get the refinance process started with the following resources. You can start with our home refinance calculator. This tool will give you a ballpark idea of your new payment, the costs associated with your mortgage and the amount of any closing fees.

When to refinance a mortgage

When market interest rates are low compared to when you first purchased your home, it’s a great time to evaluate your current mortgage to see if it makes sense to qualify for a new home loan. Additionally, if prices in your city or neighborhood have risen and you think your home has gone up in value, a refinance may be beneficial depending on your financial goals.

What types of home refinance options are available?

As a homeowner, you might already be familiar with the different kinds of loans available for refinancing. If not, that’s OK. We can help you understand the intricacies of each type.

Cash-out refinance option

A cash-out refinance replaces existing mortgages on a property, plus potentially provides cashback at closing. Because the loan is typically higher than what you currently owe, the difference between the cost of the transaction and your current loan is paid to you in cash.

Rate-and-term refinance option

A rate-and-term refinance lets you change the term (which includes the length of your loan and payment amount) or interest of your loan or both. This gives you options to lower your rate, bring in cash to lower your principal loan balance or pay off your loan faster.

What are the requirements for a refinance?

The refinance process begins with an application. You’ll need some of the same documents provided during your first mortgage loan to qualify for a refinance, like proof of income and documentation of all debts. As you move forward, your loan officer will review that information as well as your credit history and the details of the previous loan.

We’ll usually order an appraisal to verify the value and equity of the property. Your new mortgage may include many of the same fees as your initial purchase mortgage, like the appraisal fee and other loan closing costs.

Understanding your home refinance options

To help you gain a better understanding of all the options you have when refinancing, we’ve put together this list of articles with answers to some of the most common questions on this topic.

Ready to refinance your home?

Guild’s expert loan officers can help you with every aspect of refinancing a home. What’s best for you is dependent on your situation. We mind the details and sort through the complexity so you can have peace of mind. If you’d like to start the process, fill out the form on this page and we’ll be in touch soon.

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. *By refinancing an existing loan, total finance charges may be higher over the life of the loan.