Refinancing

Refinancing

Refinancing refers to the replacement of an existing debt obligation with a debt obligation under different terms. The most common consumer refinancing is for a home mortgage.

If the replacement of debt occurs under financial distress, it is also referred to as debt restructuring.

A loan (debt) can be refinanced for various reasons:

  • To take advantage of a better interest rate (which will result in either a reduced monthly payment or a reduced term)
  • To consolidate other debt(s) into one loan (this will result in a longer term)
  • To reduce the monthly repayment amount (this will result in a longer term)
  • To reduce or alter risk (e.g. switching from a variable-rate to a fixed-rate loan)
  • To free up cash (this will result in a longer term)



MJW Financial helped us remortgage our house for a lower interest rate. I chose MJW because they had an A rating which they definitely lived up to. First of all, they were kind and respectful, next they were always “Johnny on the spot” getting the process started right away, keeping the paper process going and always being there with an answer whenever I had a question. They were always available and approachable for questions, never made me feel bad for asking questions. I really was glad I went to them and if I had it to do over again, I would make the same choice. I totally recommend them. I give them an A+ rating.

Jennifer

Steps to Securing a Refinancing Mortgage Loan

Below is a brief summary of the mortgage loan process. Please note, this process is not concrete and certain steps of the process may change based on individual situations.

  1. Loan Process Begins

    • MJW discusses rates with borrower
    • Initial disclosures – which include information previously sent plus additional information requested by loan officer
  2. Underwriting Process

    • MJW submits to underwriting.
    • MJW orders appraisal of potential home
    • MJW receives initial underwriting approval with conditions (i.e.  additional items the underwriter is requesting for verification)
    • MJW sends back appraisal and conditions to underwriting for review
  3.  Additional Requests by Underwriter

    • If underwriter has additional request after initial conditions are reviewed, borrower to provide additional documents
    • MJW sends back to underwriting for further review.
    • Refer to number 3 above for following steps
  4.  Clear to Close Issued

    • Closing documents (i.e. financial loan documents, mortgage, note) ordered and sent by MJW to title company
    • Title company prepares Closing Disclosure Settlement statements (i.e. a document that shows all fees being charged)
    • Lender approves Closing Disclosure and sends wire information to title company for closing. Borrower is provided copy of Closing Disclosure so they can prepare for financial closing

Income and Asset Documents for Pre-Qualification

Do NOT black out or cross out any information on documents or they will not be accepted by underwriting. Additionally, please make sure all submissions via email are in .pdf format.

  1. Pay Stubs

    Must reflect the last 30 days and include: borrower name, company name, company address, pay period, pay date, salary/wages, current payment information, year-to-date information.

  2. Bank Statements

    Must reflect the last two months (NOTE: If a retirement account is included, must be quarterly statement). Must include: borrower’s name, address, account number, bank name. All pages in numerical order, even if blank. NO ONLINE PRINT OUTS ACCEPTED!

  3. W-2 and Federal Tax Returns

    Must include documents for the last two consecutive years (all pages/schedules). NOTE: Self-employed borrowers will need copies of all K-1s if ownership in business is 25% or more; copies of all pages of business returns will be required.

  4. Photo ID

    Must be legible. Must be provided by all borrowers/co-borrowers.