How to Refinance a Subprime Mortgage

If you have a subprime mortgage and you want to refinance you will need to read the following instructions. The instructions are a bit challenging, but you will be able to know the process required for you to refinance your mortgage at the end of the steps. You will need to find the following documents to begin these steps:

Most current mortgage statement

Insurance papers

Property taxes for the property

Let’s begin with step 1.

Step 1: You will want to contact a minimum of three lenders to find out what the current offerings for refinance are. Start with your current lender to see if they handle refinancing. If not, you may get a referral list from the lender. You can go on line, contact local banks and credit unions, or try one of the larger banking institutions. You will want to know the current interest offer, the cost of closing, and the new monthly payment for the refinanced loan. Be sure that you ask each lender to send you their offers in writing. You will want to put them side by side to compare the costs of each.

Step 2: Read and evaluate each of the offers from the lenders. You want to make sure which has the lowest interest rate and which has the fewer closing costs. If you find a lender with a lower interest rate, but higher fees associated with closing, you may not benefit as much as with the lender that offers a bit higher interest but lower closing fees. Compare carefully to decide which lender will benefit you the most.

Step 3: You have selected the lender that you want to apply for refinancing with. Speak with the lender about the length of mortgage terms. You may want to go with a slightly higher payment amount that will be paid in 15 years versus a lower interest rate, but payable over a longer period of time.

Step 4: Get an application and fill it out completely and accurately. The lender will ask for documents to verify your income and your liabilities. You will slow down the refinance process if you don’t have the documents ready and the lender must wait for you to get them in one at a time.

Step 5: Once your application has been approved the lender will set a closing date. This is where you meet at the selected location to sign paperwork. This process is like the process that you went through when you made your first mortgage on your home.

If you want to get more information on how to refinance a subprime mortgage, please visit the website of Steven Merkins: How Much is Private Mortgage Insurance and How to Build Equity in Your Home