Refinance FAQs

Should I refinance?

To determine whether or not it is a good idea for you to refinance, you should look at your specific situation and your motivation for refinancing. The most common reasons to refinance are to reduce your rate and/or payment, convert from an adjustable to a fixed rate, or pull cash out of your equity to consolidate debt or improve your home. Your Hometown Lender can help you determine whether or not refinancing makes sense for you.

How much can I save if I refinance?

Every situation is different. It depends on what the current interest rate is and what your motive is for refinancing. If your current rate is higher than what is available in the market, it might make sense to refinance. To get an idea of what you could save by refinancing, check out our calculators or call one of our Hometown Lenders for some expert advice.

What if I have a second mortgage on my home? Can I still refinance?

Second mortgages may be paid off through the refinance. We will consolidate both loans into one new first mortgage and you will only have one payment each month. If you’d prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance the first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.

Am I allowed to refinance if my property value is less than what I owe?

There are options that may allow you to refinance your loan even if the value of your home is less than what you owe. Call and speak with one of our Hometown Lenders to see if you qualify for one of our programs.

What are the costs associated with refinancing?

Each situation is different. Standard fees generally apply. Contact one of our Hometown Lenders for details.

What type of documentation do I need for refinance?

Standard documentation collected for a refinance transaction includes information regarding your income such as paystubs covering the most recent 30 days, W-2s and tax returns for the last two years, asset information such as bank or mutual fund/stock statements covering the last 60 days and current loan information such as your most recent mortgage statement and homeowners insurance declarations page. Additional documents may be required.

Can I refinance with blemished credit?

Depending on the reasons why your credit is imperfect, there may be loan options available. Call and speak with one of our Hometown Lenders to determine whether or not you qualify for one of our programs.

Is it true that you should only consider refinancing if you can lower your rate at least .5%?

There is no rule-of-thumb when it comes to refinancing because there are different reasons to refinance. If you are currently in an adjustable rate looking to get into a long-term fixed loan, your rate and payment may actually increase, but you will be in a better long-term situation knowing your rate and payment will remain stable. If you are looking to consolidate debt, your loan amount and mortgage payments may go up but your overall monthly outflow will decrease because you will have eliminated some or all of your credit card bills and other monthly obligations. There are also no-cost and low-cost refinance options that can lower your rate and payment with no or minimal investment. It is a good idea to go over your specific situation with a Hometown Lender to determine whether refinancing makes sense for you.

What happens at the loan closing?

Depending on where your property is located, you can either sign the documents associated with your loan in your home or at a designated settlement location such as an escrow office or attorney’s office. Typically this is done in the presence of a settlement agent. If a financial contribution is required, a certified or cashier’s check will be necessary.


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