What is A Refinancing Mortgage? A Quick Guide

What is A Refinancing Mortgage? A Quick Guide

It has happened to many people who have bought their first home. They seemingly lock in a good deal with their mortgage provider, and a few years pass when suddenly, the payments skyrocket, and they are left feeling angry. It’s understandable, to be fair!

When it comes to mortgages, you may be happy to learn that you may not be as locked-in as previously thought. There is the option to take out a refinancing mortgage which, in most cases, will help you to pay off the loan quicker, as well as alter the interest rate to a more affordable level too. Great!

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So, if this sounds like something that you are interested in doing, read on to learn more!

Why Apply For A Refinancing Mortgage?

There are many reasons why someone may decide that they want to refinance their home mortgage. As mentioned before, it could be due to wanting to get lower monthly repayments, change the interest rate to a lower level, or even lower the mortgage payments themselves. The best mortgage lenders in Georgia can help you to explore whether or not refinancing your mortgage is in your best interest or whether there is another option that can offer more benefits.

How To Apply For A Refinancing Mortgage

Remember how it was when you initially got your mortgage? The process is quite similar, as you will need to undertake credit checks as well as look at the outstanding amount that needs to be repaid on your current mortgage. You will need to prepare all of these legal documents as well as evidence of your income when you apply for refinancing your home.

The documents needed typically involve three months of bank statements, proof of employment, or evidence of being self-employed, such as tax returns, recent utility bills, documents that have your address over the last three years, and photographic identification, like a driving license. It is also worth investing in a credit report.

Refinance With The Same Lender or Not?

There is no need to refinance your mortgage with the same lender; very few people do, simply because they have found a better rate elsewhere.

Just make sure that you keep up the payments with your current lender before you switch, as not doing so will impact badly on your report and reapplication.

Refinancing and Your Credit

If your refinanced mortgage payments are lower than your current mortgage payments, then this can actually improve your credit score in the long term. This is because it shows that you are trustworthy and, much like the original mortgage itself, it shows that you and your partner have undertaken rigorous financial testing to get those lower payments. Even if your credit score is low or poor, it is always a good idea to consider refinancing the mortgage on your home.

Of course, if you aren’t sure if it is a worthwhile decision to refinance your mortgage, you should talk to a specialist broker who can offer you insight and advice on this process.

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