Total mortgage applications shot up 7.3% due to refinances just recently. Currently, every lender is trying their hardest to help people take advantage of the historically low mortgage rates, but they’re also required to validate as close to the closing date as possible that their clients remain employed. This is to minimize risk of defaulting on the mortgage, which is beneficial for both you and the lenders.
As such, in order to get your best chance at a mortgage refinance, get to the closing stage quicker.
To do this, prepare the proper documents quickly or even beforehand. Without the proper documents, the process can take a long time (60 – 90 days) when, on average, it should take only 15-20 days. An example of some documents that may be asked of you are some recent pay stubs, proof of one-year’s worth of mortgage payments, and a copy of your homeowner’s insurance declaration page.
Another bit to be aware of is PMI (Private Mortgage Insurance). You will most likely pay private mortgage insurance, or PMI, on loans that are for more than 80% of the value of the home. Because of this, you can stop paying PMI once you have 20% equity in the property you are interested in. This can be easily circumvented with a down payment of at least 20% of the house value.