What Happens When You Refinance Your Home?

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Hi my name is Matt McKellen and I'm with Innovative Financial Group. A question that is posed to me is what happens when you refinance your home loan? First off the process is very simple to when you first purchased your home.

You fill out a loan application with a bank or with your mortgage broker, they pull your credit and then at that point what they're going to do is ask you to provide them with income information. That's usually the last 30 days of pay stubs, maybe the last two years W-2s if you're salaried, if you're self employed maybe the last two years of your tax returns -all pages. At that point if the income checks out the lender or broker will coordinate a new appraisal on your home.

They will send an appraiser back at your house just like when you bought your home to get a better idea on what the actual market value of the property is, based on sales in your neighbourhood for the past 3 to 6 months. Once they receive that appraisal back they submit everything to an underwriter for the funding bank.

The underwriter will sign off everything and if the loan is approved you will go to closing it, generally at a title company. Then they will take your old loan and pay it off- if you're taking cash out you will receive a cheque for the difference and nine times out of 10 they will do all your closing costs into your new mortgage. So that's basically the steps to refinancing your home it's very similar to when you purchased your home. I think the key factor that they're more concerned with when you want to refinance is what is your home worth now?

Again my name is Matt McKellen and I'm with Innovative Financial Group.