How To Get a Home Refinance Loan

The biggest bill that most people pay on a monthly basis is their home mortgage. At some point, you may consider refinancing your home mortgage. There are a few common reasons that one would consider a refinance.

  1. To lower your interest rate. As loans are traditionally paid over 15 or 30 years, even a fraction of a percentage change in your interest rate can lead to substantial savings.

  • To cash out and to utilize your equity. As housing prices increase and your loan principal decreases, you build equity in your home. Equity is the difference between the value of the property and what you owe on it. Some people refinance to take cash against the equity they have built on the home.
  • To lower your monthly payments. If you have paid down a significant amount of the initial loan principle, you can refinance the loan for lower payments. This is done by "restarting" the time it will take for you to pay the loan in full. For example, if you are 10 years into a 30 year loan, you can refinance the loan for another 30 years resulting in lower monthly payments (depending on current interest rates, of course).
  • To pay off the home sooner. You may choose to refinance the home to choose a shorter life span on the loan. For example, refinancing a 30 year loan to a 15 year loan.
    So if you choose to refinance a loan, where do you start? Bear in mind that there are usually fees to refinance a home loan. These can range from a few hundred to multiple thousands of dollars. There are a number of ways to refinance your loan.

    1. Contact your current mortgage company. If you look at your monthly bill or last statement, you should find a phone number for customer service. Give them a call and discuss the loan options that the company offers for refinancing. This may prove to be the easiest method as the current mortgage company will already have all the necessary information on the property and borrowers.

  • Visit or call any major financial institution. Almost all major banks and credit unions offer home loans and refinancing. You can visit your local Bank of America, Wells Fargo or Washington Mutual branch and discuss your loan options with a banking specialist. You can also visit their websites to obtain a quote and to get more information on a home loan.
  • Go through a third party home loan vendor. The Internet is full of loan companies that will refinance your loan. Reputable companies, such as Quicken, are also now offering refinances over the Internet. There are other companies, such as Ditech who can also help you with a refinance. Simply point your browser to their website or utilize a search engine such as Google to find home mortgage refinance companies.
  • Check your local newspaper's real estate section. Most major metropolitan newspapers will include a weekly real estate section. In that section, you will find a list of local home loan vendors who you can help you refinance your loan.
    It is recommended that you get multiple quotes for the home refinance. Almost all companies offer their quotes at no charge. Many companies can offer you a variety of loans -- make sure that you are getting the best rate at the best price. The right home loan can make a world of difference for you and your family.


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