Once you understand what a cash-out refinance is, its pros and cons, the next step is to decide whether you are interested or not. For those who may like to benefit from an Arizona mortgage refinance, starting this process is relatively easy. More so, if you have prepared yourself adequately. The procedure of starting a cash-out refinance is the same as the one you went through with your current mortgage.
Step 1 – Choose a Lender and Fill Out an Application Form
To initiate a cash-out refinance. You must settle on a particular lender. You obviously shopped around for mortgage rates during the preparation stages and identified a suitable lender. These days the application for mortgages is pretty quick and easy.Step 2 – Provide Financial Documents
Before granting your request, a lender needs to look at your financial records. Therefore, they may ask you to provide financial documents such as W-2 forms and pay stubs. In most cases, these are the main documents that will be needed. One of the key requirements for a cash-out refi is proof of employment, and that’s why homeowners have to provide paystubs. Since not all lenders are the same, they may ask for additional documents. It’s crucial to have all your paperwork ready.Step 3 – Get a Home Appraisal
To determine how much equity you currently have, you will need appraisal services. Please note that the homeowner should pay for home appraisal fees. They will be included in the closing costs. Appraisal fees range from $250 to $500 depending on the location and size of the home. Getting a home appraisal is a critical step that benefits you and the lender. For homes that have been recently appraised, the lender may choose to skip this step. After obtaining your current home value from the appraiser, you can use our refinance mortgage calculator Arizona to determine how much you will cash out.Step 4 – Wait through the Underwriting Period
Various lenders have different underwriting timelines. During this stage, the ball is no longer in your court. Your lender will go through your financial documents and determine whether you are an ideal candidate for a cash-out refi. It’s crucial that you be responsive to information requests. At times, a lender may require additional details. Once the verification is done, the lender will reach out and inform you about their decision to refinance your mortgage and pay the equity in cash.Step 5 – Close on the Loan
After the appraisal, most of the things are handled by the lender. You just have to make yourself available during the closing stage and sign in on the loan. When closing the loan, bring all documents that the lender will request. It’s important to know that there are closing costs which you will have to pay. There is the option to pay right away or roll the costs to the loan. The latter option often comes with interest. If you can afford it, it would be best to pay the closing costs on the spot.Step 6 – Receive Your Cash
With a cash-out refi, you don’t often receive the funds on the same day. The check is disbursed later on. After the funds arrive, you can use them to fund a home improvement or renovation, pay for your kid’s tuition or spend the funds how you see fit. Conclusion That’s how you can start a cash-out refinance and see it to the end. It’s not a complicated process, but it’s crucial that you know how to go about it. This will help you avoid unforeseen surprises when applying for an Arizona mortgage refinance.Latest Articles
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