Mortgage Tips: Understanding the Refinance Process

By Gil Mackey
Local Lender Columnist
May 19, 2008
"I want to refinance my home, but I don't know where to begin!" This is a common issue for San Francisco homeowners; these refinance tips should help you get started.

The Mortgage Refinance Process

Before you think about a mortgage refinance, make sure you understand the mortgage you already have:

• What kind of home loan do you have now?
• Are there prepayment penalties if you refinance?
• What is your current interest rate?

Why Refinance?

After refreshing yourself on the details of your current mortgage, you need to evaluate why you want to refinance. Do you need to:

• Avoid foreclosure?
• Lower your monthly mortgage payments?
• Take cash out?
• Get a lower mortgage rate?

The Finances

The next step in the San Francisco refinance process is to determine your budget and credit rating:

• How much can you afford in a monthly mortgage payment? Outline your monthly expenses to come up with a payment you can handle.
• Have you checked your credit report? Are there any errors that need to be addressed, or collections that should be resolved before applying for your refinance?
• Prepare copies of paycheck stubs. Though some lenders might qualify you for a mortgage refinance without verifying income, it is a good idea to provide verification if you can.

Shop & Compare

This is one of the most important steps in the refinance process. Many San Francisco homeowners only talk with one or two lenders, most often their current mortgage company. By not shopping around you could miss out on a better deal.

• Compare loan offers with several lenders.
• Make apples-to-apples comparisons. Don't compare one type of loan to another or different loan amounts.
• Compare interest rate as well as APR.
• Compare closing costs and fees.

About the Author
Gil Mackey has been a writer and artist for the past twenty years. In addition to freelance writing, Gil writes for his local paper, and lives with his two children in Nevada.