How to refinance

If some time has passed since you purchased your dream home and you would like to lower your monthly mortgage payment, change the terms of your loan or consolidate debt, you may want to consider refinancing. Since you’ve already been through the mortgage process, you’ll find that refinancing may be a smart way to improve your financial situation.

And with today’s technology, the application process is straightforward — especially if you follow these steps.

Talk with a lender

The interest rate, the amount of the loan and the estimated closing costs of a refinance help determine the monthly payment options and possible terms available.To help decide upon the best loan for your needs, you should talk with a U.S. Bank Mortgage Loan Originator who can answer your questions and help you find the solution that's right for you.

Prepare the necessary documents

Since you will be paying off your old loan and taking out a new one, you’ll need to submit many of the same documents you provided the first time around. Tax returns and/or W2 forms will show that you have adequate income. Bank and brokerage statements will demonstrate that you have reserves to tide you over through a job loss or an emergency repair, though not all refinances require this documentation.

Consider cash-out refinancing to consolidate debt or fund a home improvement project

If you have significant equity in your home, cash-out refinancing enables you to consolidate debt, such as credit cards, auto loans or student loans, with the benefit of a lower interest rate. Your outstanding debt may be able to be included in the amount borrowed on the home to give you the convenience of a single monthly payment. Alternatively, with cash-out refinancing, you may receive funds at closing to pay off debts.

Similarly, if you need funds for a major home improvement project, you may be able to roll the cost of the project into the amount borrowed, or use the cash-out from a refinance for the project.

Review your options

Just as with your first mortgage, you’ll need to decide the length of the loan, as well as whether you want a fixed or adjustable-rate product. Also, be aware that variables, such as upfront points and closing costs may influence your interest rate and your monthly payments.

Prepare to close

If you have gone through a closing at least once before, you know that it’s important to follow all guidelines and review your paperwork carefully. You’ll need funds for a new appraisal and closing costs as specified by your lender. These expenses should be clearly identified in your loan estimate to ensure you’re fully informed of the borrowing costs.

When you’re looking to refinance, it pays to work with an experienced national lender so that the process is streamlined and efficient.