Refinancing a Home

Refinancing is smart and refinancing with Community Banks of Colorado is even smarter. Check out the benefits below!

Lower your monthly payment
Looking to lower your payment? There are a variety of options that could help you do just that. One way would be to see if you can take advantage of a lower interest rate and refinance your existing loan. Maybe you have a first and second mortgage and combining the two into a single mortgage payment could actually lower what you pay every month. If you have a FHA loan or Private Mortgage Insurance on your current loan, and you have equity in your home, you may be able to eliminate monthly costs by refinancing!

Consolidate debt
When compared to credit card debt and other short-term financing, your home loan should have the best interest rate and, if you have equity in your home, it is often advantageous to use this low rate and put the value of your home to work to pay off higher interest rates. This could be in the form of a cash out refinance or even a Home Equity Line of Credit. 

Get cash from your home
Need to pay for improvements, education or an upcoming event? Using the equity in your home and taking cash out by refinancing your existing loan will put the value of your home to work for you. Another option would be to apply for a Home Equity Loan to get the cash that you need in one lump sum and provide easy monthly payments. A Cash-Out Refinance is available on either a fixed rate or an adjustable rate mortgage. Your Mortgage Banker can provide information about the differences and help you decide which solution best fits your financial needs.

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Let's Get Started

Ready to get started, but aren’t sure what exactly happens on your journey to purchase a home? Go ahead and take a look at what you can expect.

1. Start the application process
Together we will work with you to find out what your long-term goals are and if a refinance is a beneficial solution. Once we determine if a refinance makes sense, it’s time to apply and get the process underway! You can do that in person, or online. Wanna find a Mortgage Banker near you? We can help with that, too.

2. Gather the necessary documentation
We will complete an initial review of your mortgage application and then we will begin the documentation state of the mortgage loan process. During this stage, we will be asking for critical documents to keep the process moving. These documents will include W-2s, tax returns, bank statements, pay checks and more. If you are self employed there may be additional documentation needed.

3. Review and underwrite the loan
During the underwriting stage the underwriter will be completing three important tasks in regard to your home loan. The first thing the underwriter will do is compile and organize the documentation you have already supplied. Next, the underwriter will reconstruct your mortgage scenario to make sure it meets all qualification guidelines. And, finally, the underwriting team will take steps to verify all information you have supplied is accurate. It is not uncommon for the underwriters to ask for additional documentation at this time.

4. Determine the value of the property
In the appraisal stage a licensed third-party appraiser will estimate the value of the home you are looking to refinance. This is meant to insure the home is worth the price being offered. The appraiser will use two basic ways to determine a home’s value. The first, and most common method, is to compare recent home sales in the neighborhood, typically over the previous six-month period. The appraiser might also consider the replacement cost of the property when estimating value.

5. You are approved
After the loan have been approved by underwriting and the appraisal has been confirmed to be sufficient, you are approved! The approval you receive at this stage is conditional and assumes that nothing significant will change between now and the time we fund your loan. So, remember, no major purchases and no radical or extreme life changes. Here are more tips on what to avoid during the mortgage loan process.

6. Clear to close¹
Congratulations! We have officially gained our clear to close. This means your mortgage loan has been fully approved and final documents are ready to be prepared. Barring any unforeseen last minute changes, your home will be refinanced soon. At this time, a closing date will be scheduled for the loan.

7. Close on your home
At the closing, we will “fund” the loan with a cashier’s check, draft or wire to the existing lender in exchange for the title of the property. This is the point at which you have completed the loan process and the transaction is “closed”!

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¹Subject to final underwriting approval.