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People refinance their homes for all sorts of reasons. Sometimes it’s to remove a person from the mortgage (like in the case of a divorce), or it’s to capitalize on lower interest rates. Whatever your reason, if this is something you’re interested in doing this summer in North Carolina, here are some tips to help get you started. 

Essentially this is where you get a new loan for your home. The new one pays off your existing loan. But you’re left with only one monthly payment, and oftentimes with a lower interest rate than before. 

The lender will need most of the same information from you as they did when you first obtained a mortgage. They’ll look at things like your income, credit score, debt, and other assets to ensure you’ll be able to pay back the loan. It’s a good idea to have items like pay stubs, W2s, and bank statements ready for a meeting. 

If you get a nice interest rate at the time you get approved, it might be a good option to lock in that lower rate. This means that you’re guaranteed that interest rate as long as the lender closes on your refinance within the allotted time. It can be a good move if you’re worried about getting stuck with a higher interest rate. 

During a refinance, the lender will go through the underwriting process. Underwriting is when the lender verifies your financial information. This also will include a home appraisal to see how much your home is currently worth. In order to get a lower mortgage rate or get cash out of the refinance, the home has to appraise at a higher value than the loan you want to refinance. 

You’ll want to present your house in the best way for the appraisal so tidy up, do any minor repairs necessary and perhaps even compile a list of upgrades you’ve already made to the home. 

Refinancing could be a great idea to build equity or get cash-in-hand this summer in North Carolina!