Why are you considering refinancing your loan? Are there other options to explore?

Refinancing might be a good option for homeowners who want to:

  • get a lower interest rate,
  • decrease the term of a mortgage,
  • reduce the monthly payment,
  • consolidate two mortgages into one,
  • help on family matters, such as a paying for college or
  • take advantage of the programs offer by FHA, Freddie Mac and Fannie Mae.


If it does make sense to refinance, homeowners need to follow these steps.  The refinancing process can be hard to understand and possibly a little frustrating.


     First step: Homeowners should sit down with a well-trained, HUD-approved counselor for a face-to-face counseling. The counseling is free.


     Second step: Call your mortgage company to find out who holds the loan and if the company is willing to refinance based on investor guidelines.  With the help of the counselor, the homeowner can begin an application over the phone while talking with the mortgage company.  It also is a good idea to talk with local mortgage brokers to find out what options they can offer. After talking with the existing mortgage company and/or mortgage brokers, the homeowner should receive a good-faith estimate or settlement sheet and the borrower will be able to understand all fees in this transaction.


     Third step: Do the math! Always do the math and know that you are comfortable with all of the financial implications, both short term and long term, of the refinance transaction.