Refinancing your mortgage basically means that you are trading in your old mortgage for a new one, and possibly a new balance [1]. When you refinance your mortgage, your bank or lender pays off your old mortgage with the new one; this is the reason for the term refinancing.

What questions should you ask a mortgage lender?

Mortgage Questions To Ask Your Lender

• What Types Of Home Loans Do You Offer?
• Which Type Of Mortgage Is Best For Me?
• What Will My Interest And Annual Percentage Rate Be?
• What Is The Loan Estimate?
• Do You Handle Underwriting In-House?
• What Is Your Average Loan Processing Time?

Which two of these should you do if your lender rejects your loan application?

1. Read your explanation letter. When a lender denies your loan request, they are required to send you an explanation letter.
2. Raise your credit score. One of the best ways to encourage lenders to approve your loan application is to improve your credit score.
3. Save a bigger down payment.
4. Ask someone to cosign.
5. Wait to reapply.

How to find out if you fit into a refinance program?

“The best way to find out if you fit into a program is to go to a lender.” Roy Meshel, district vice president for W.J. Bradley Mortgage in Phoenix, recommends homeowners refinance quickly in case the housing slump deepens, causing values to depreciate even more.

What should you ask yourself before refinancing your mortgage?

Before jumping into refinancing, ask yourself these four questions to decide if it makes sense for you. With interest rates at near historic lows (again), refinancing might be on your radar, which means you may be able to swap out your old, higher interest rate for a new one with lower rates.

What happens when you refinance a 30 year mortgage?

Finally, remember that refinancing adds more years to your loan. A 30-year mortgage could quickly turn into a 40- or 45-year loan through refinancing. And because of the way amortization schedules work, the bulk of a mortgage’s interest is paid at the beginning of a loan.

Are there closing costs when refinancing a home?

Just as with your current home mortgage, the refinancing process will also include closing fees. Communicate with your lender and ask what you need to bring to the closing table. Closing costs can include a variety of fees—bank, appraisal and attorney fees—for the services and expenses needed to finalize a mortgage.