How a Refinance Works

Posted on February 5, 2021

Refinancing is the process of replacing an existing mortgage with a new loan. You can refinance your mortgage to lower your monthly payments, lower your interest rate or change your loan terms altogether. Regardless of why someone chooses to refinance, the process is very similar to the process you went through to apply for your current mortgage.

How it works

To refinance your mortgage, you will need to apply for a new loan, just like when you applied for your original mortgage. Lenders will require you to provide some new paperwork and meet a few more requirements in order to be considered for a refinance.

Maintained original mortgage: Your lender will need proof that you paid your original mortgage for at least 12 months. You can prove this through a mortgage statement.

Equity: Talk to your lender about the percent of equity you have in your home currently and if it makes sense for you to refinance or if you should wait until you have more equity in your home. In some cases, if you have enough equity in your home, you might be able to cut out your home insurance costs through a refinance.

Income: Whoever is on the loan will need to prove they have a regular income Your lender will also check your debt to income ratio (see our DTI blog here) to make sure you can still pay your bills based on the amount of money you make and any existing debts you have.

Time: You can do a break-even analysis to see if you’ll be in your home long enough to benefit from the savings that a lower interest rate and payment could bring you. based on how much time you have left on the loan and how long you are planning on staying in your home.

Ready to refinance?

If you are thinking about refinancing or want to learn if now is a good time for you to refinance, reach out or start a refinance application now. One of our qualified loan partners will be happy to help you get started on your refinance.

Justice Roberts Loan Officer

Justice Roberts

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NMLS# 1269831
206-408-1241
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Over the last ten years my family and I have struggled moving from one place to another never staying long anywhere. It was a nightmare changing schools, forwarding mail, packing. Team Justice helped us get the home we've always wanted they helped us put down roots. We are happy to have worked and continue to work with them they go above and beyond. Even helping us refinance. Made buying a home enjoyable.

Viola H.

Justice did a great job with me. Actually better then great. I consider him my life long mortgae man. I highly recommend him and his team. They went above and beyond what they had to do and closed my loan so smoothly and seamlessly and in a very fast time.

Mark D. | Tacoma, WA

The timing of needs and the communication was the best I've ever experienced..bar none! The ease in which documents were submitted and signing of others is phenomenal. I would highly recommend them to anyone I meet..but only if you want exceptional service.

Joseph W. | Tacoma, WA

Justice and his team were an integral part of our home buying process. They made it so easy and explained everything in great detail what we needed to purchase our first home. I would highly recommend this team to anyone. So personable and answered all my questions on the spot with accurate information. Thank you so much!!

Dominique B.

Justice and Jessie where absolutely great to work with, very professional, timely, and on it, I will always do my home lending with them. They made sure to check in with us at least once a week through out the process that lasted over 4 months, not once did I feel like they got tired of working with us or anything. They always have such a great attitude and always wanting to help!

Wascar Carpio

It’s been a pleasure to work with Justice and his team. If you are wanting constant communication through your loan process, immediate response to your questions via email or text, professionalism, and someone to trust as you make a big decision such as buying a home, look no further than Justice and his team. You all have been wonderful to work, thank you again!!

Maria S. | Edmonds, WA

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Note: “Loan approval and rate is dependent upon applicant’s credit, collateral, financial history and program availability at time of origination. Rates and terms are subject to change without notice. This is not a loan commitment or guarantee of any kind. 1265 Corona Pointe Court, Suite 301, Corona, CA 92879. ©2019 Paramount Residential Mortgage Group, Inc. (NMLS ID 75243) has the following Licenses: CA Department of Business Oversight, Residential Mortgage Lending Act License#4131268 and Finance Lenders Law License #603D903, AZ Mortgage Banker License #910387, Georgia Residential Mortgage Licensee #32807, IL Residential Mortgage Licensee #MB.6760962, Kansas-Licensed Mortgage Company, #MC.0025196, MA Mortgage Lender License #ML75243, ME Supervised Lender License #SLM12384, MS Department of Bank and Consumer Finance, NV Mortgage Broker License#3693, License by the NH Banking Department 17393-MB, License by the NJ Banking Department and Insurance, OH Mortgage Broker Act Certificate #MB.804171.000, OR Lending License #ML -4437 Dept. of Banking in the Common Wealth of PA#37894, RI Licensed Lender #20112799LL, and is also approved to lend in: AL, AK, AR, CT, DE, DC, FL, HI, ID, IA, KY, LA, MD, MI, MN, MO, MT, NE, NM, NC, ND, OK, OR, SC, SD, TN, TX, UT, VA, VT, WA, WV, WI. Governed by the CO Department of Real Estate.www.nmlsconsumeraccess.org (12/17/19).” Powered By Loan Officer X.

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