How to Refinance

Mortgage Refinance

Summary: Homeowners can replace their previous mortgage for a better interest rate and lower monthly mortgage payments with a refinance. Like purchasing, the refinance process also considers the homeowner’s income, credit score, debt, and the property’s value. The general steps to refinancing are: contacting a refinance lender, locking in your rate, going through the underwriting process, getting an appraisal done, and closing on your new mortgage.

Homeowners can replace their current mortgage with a rate-and-term or a cash-out refinance. The transition can provide homeowners with a better interest rate, lower monthly mortgage payments, or the option to use their equity to take cash-out.

Rate and Term Refinance
A rate-and-term refinance allows homeowners to replace their previous mortgage with a new one. Homeowners may get a lower interest rate—depending on the market—or better loan terms with options to shorten the number of years on the home mortgage loan.

Cash-Out Refinance
For homeowners who are thinking of refinancing and hold more than 20% in home equity, a cash-out refinance is an additional option for them. A cash-out refinance allows homeowners to refinance their current mortgage and cash-out the difference. Homeowners can withdraw up to 80% of the home equity.

Below are the summarized steps a homeowner may experience when refinancing:

  1. Reach out to the Professionals
    The first step is to reach out to refinance lenders and talk to a Loan Officer. To better understand your situation, Loan Officers will request financial information such as your W-2s, pay stubs, asset statements, debt statements, and additional documents. Once your financial situation has been assessed, they will advise and offer you refinancing options.
  2. Lock in Your Rate
    If given the option, homeowners can lock in their new interest rate. The new rate will be guaranteed regardless of the moving market for a defined amount of time. Hall Financial clients can lock in their interest rates for 30 days.
  3. Go Through the Underwriting Process
    Once refinance terms have been agreed on by the homeowner and their Loan Officer, all information will go through an underwriting review. Underwriting is an additional verification of the homeowner’s financial information to make sure everything is correct and accurate. If there are any discrepancies, the underwriter will notify your Loan Officer who will then reach out to you to fix all issues.
  4. Get an Appraisal
    Getting an appraisal done is important especially if homeowners are opting for a cash-out refinance. The appraisal examines the interior and exterior of your home to validate its value. For cash-out refinance, the home appraisal highlights the amount of equity homeowners may have.
  5. Time to Close!
    Once your lender has received the appraisal value and all loan documents are finalized, a notary will be sent to your home with closing documents. The notary will confirm your identity and have you sign the documents.

Like purchasing, refinancing also has closing costs. However, homeowners may choose to roll their closing costs into the loan.

For more information, chat with us at or give us a call at 866-Call-Hall.