Mortgage Refinancing 101

 

An Overview of Mortgage Refinancing

With interest rates beginning to improve, you may be watching and waiting for the right time to refinance your mortgage to a lower rate and/or change the term. If you’ve never been through the process, it may seem daunting and complex, but it doesn’t have to be if you know the steps involved.

 

REFINANCING

So what is refinancing? It is essentially replacing your current mortgage with an entirely new loan. Your current loan is paid off by the new loan with the finalization happening at a closing similar to when you first purchased your home. 

 

ADVANTAGES

The advantages of refinancing are many and include lowering your monthly payments, saving money on interest over the life of the loan, paying off your mortgage sooner, and utilizing your home’s equity toward a special project like a home renovation or an event like a wedding or vacation.

 

COST

Homeowners looking to refinance their mortgage can expect to pay anywhere between 2% and 5% of the loan amount in refinancing fees. However, the costs usually can be rolled into the loan so that there are no out-of-pocket costs.

 

“If you decide to refinance with us at Southeast Mortgage, we can get the front-end work done for you in advance and then monitor the interest rates for you, letting you know when the rates are where you want them to be before officially beginning the process,” says Southeast Mortgage of Georgia’s Vice President and Executive Mortgage Loan Originator Todd Littlejohn. He adds, “and we can do a "soft pulling" of your credit and advise you on what you need to do before refinancing.” It is important to note that credit scores are not affected by soft credit checks. 

 

However, if you closed on your home in 2023 with Southeast Mortgage, their “Zero-Lender Fees” policy allows you to refinance within 2 years without lender fees being assessed.

 

TIMELINE

Because the process is similar to when you originally financed your home, expect it to take between 3 and 4 weeks depending on your lender’s timeline. If you are in a hurry to get through this process, ask potential lenders what their turnaround time is. Like your first mortgage, you’ll need to get pre-approved, lock in your new rate, provide certain financial documents, and sign all of your documents at closing.

 

HOW TO SHOP FOR A LENDER

There are many lenders out there so it’s important to find one you can trust. Therefore, you may want to ask friends and family if they can recommend someone. Do your due diligence and learn as much about the company as you can including reading its Google reviews. Using a local originator helps as well and your Realtor can refer you to someone they’ve worked with and know.

 

According to Southeast Mortgage’s Todd Littlejohn, “You'll want to make sure the lender’s representative that you're considering working with is a licensed originator and not an assigned originator, the latter of which is not licensed through NMLS (Nationwide Multistate Licensing System & Registry).” Licensing requires coursework, testing, state and FBI criminal background checks, and employer sponsorship. 

 

Southeast Mortgage of Georgia is based in Georgia and has been in business for 30 years. They are direct lenders and not a broker so when you do business with them, you deal directly with Todd and his team.

 

HOW TO KNOW A REFINANCING IS RIGHT FOR YOU

What are your goals for your home? How long are you keeping it? It's important to understand your long-term and your short-term plans for owning your home as they affect your decision to refinance your mortgage.

What is your current loan rate? What rate would you like to have it at? As rates slowly begin to lower, it's important to not only monitor the interest rates but to have a lender lined up for when you are ready.

How long will it take to recover the refinance cost? If your goals are short-term regarding staying in your present home, it may not be a wise investment to spend the cost of refinancing.

 

GETTING STARTED

 

Whether you're in the process of purchasing, selling, refinancing, or constructing your ideal home, the success of your mortgage journey rests heavily on the expertise of your mortgage professional. Given the dynamic nature of market conditions and loan programs, it's crucial to partner with someone who stays ahead in the industry. Todd Littlejohn and his team are available to assist you in navigating the plethora of innovations and options available, ensuring you secure the mortgage that perfectly aligns with your needs. Southeast Mortgage of Georgia can be reached at (770) 727-2272 or by emailing them here.
 

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*In the interest of transparency, The Mountain Life Team would like to disclose that we have entered into a Marketing Service Agreement or Advertising Agreement with Southeast Mortgage of Georgia, Inc. The Mountain Life Team/Keller Williams Realty Partners will receive financial compensation from Southeast Mortgage for marketing or advertising their services. However, there is no direct compensation paid to any individual agent. We are not directly affiliated with, and you are under no obligation to utilize such a provider.