How to Refinance a Mortgage for What Is Owed
- 1). Determine whether you want a fixed-rate or adjustable-rate mortgage. An adjustable rate can fluctuate over time and a fixed rate stays the same for the entire loan term. An adjustable-rate mortgage may offer a lower rate to start, but it's less predicable in the long term.
- 2). Secure a low interest rate. Pull out your most recent mortgage statement to determine your current rate. Then, visit online comparison tools, such as Bankrate.com, to find the lowest mortgage rates. Make a list of the most attractive lenders.
- 3). Contact your existing lender. Tell the lender about the best interest rate you found. Explain that you want to refinance the mortgage for what's owed (no cash out). Ask the lender to match the competitor's rates. Lenders often have low-cost (or no-cost) refinance options to retain loyal customers.
- 4). Gather the required documentation. Most lenders require at least two recent pay stubs, one to two months of bank statements and retirement account statements. Having this information handy will help expedite the processing of your loan.
- 5). Sign loan documents. Most lenders take 30 to 60 days to process a loan. When loan documents are ready, the lender will call to set up a signing date. Read the loan documents carefully. Make sure the loan term and interest rate are correct before signing.
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