Chicago Refinance
Neighborhood Loans
December 22, 2021
If you own a home in the City of Chicago, you’re already familiar with the high cost of living that comes with it. Finding ways to save money is always on the mind, but you need to remember that there are some costs associated with refinancing.
Here at Neighborhood Loans, we’ve streamlined the Refinance process to help you save money and stay stress-free. We sit down with our clients to go over the best possible option for you, and only move forward with the process if it makes financial sense. Every homeowner wants the lowest interest rate, but sometimes your homebuying schedule and the market don’t line up. That’s where refinancing comes into play.
Before you jump into the refinancing process, it’s important to outline your goals. There are many different reasons to refinance a home and while a lower interest rate is one, there are other ways to take advantage of refinancing.
Lower Your Interest Rate
Lowering your interest rate is the most common reason to refinance a home. If you’re able to secure a rate that is lower than your current one, it is usually worthwhile to refinance! As you know, a lower interest rate means a lower monthly payment and paying off your home faster. It’s important to shop around and visit a few different lenders – depending on your financials, they’ll be able to offer you different rates.
Shorten Your Term
If you’d like to pay off your mortgage faster, while saving money on interest, you can shorten the length of your term. For example – if you have 25 years remaining on a 30 year fixed mortgage but can now pay off your home in 10 years, refinancing will allow you to do so. The shorter your term, the faster you build equity in your home, and the quicker you own your home. If possible, you can also lower your interest rate during this process.
Removing Private Mortgage Insurance (PMI)
Private Mortgage Insurance might have been required for your home loan if you weren’t able to put 20% down at the time of closing. If your loan-to-value (LTV) ratio is 80% or below, the PMI can be removed from your monthly payment. It will be automatically removed once your LTV reaches 78%, but if you’re looking to refinance, removing PMI at 80% is another way to save money.
Switching from an Adjustable Rate
Mortgage to a Fixed-Rate Mortgage Many people get into adjustable-rate mortgages with the intention of selling the home after the fixed period ends. If rates are on the rise and you’re looking to get out of your adjustable-rate mortgage, refinancing to a fixed-rate mortgage is one of the best options! While you might not be able to secure a lower rate – you won’t have to deal with
Cash-Out Refinance If you’re interested in making additions or improvements to your home, you can use a cash-out refinance program. Using the current equity in your home to increase its overall value is a great way to invest in your future. There is an endless list of different home projects you can get completed with a cash-out refinance.
Consolidate Debt If needed, you can use the current equity in your home to pay off other expenses. While this will be a setback and take longer to pay off your home – it could be useful if you’re in a pinch for cash.
FHA Steamline If you are in a loan program that is backed by the Federal Housing Administration (FHA), there is a refinancing program just for you. The process is ‘streamlined’ because qualified borrowers don’t have to worry about an appraisal and don’t have to provide extensive documentation. You must be current on payments and be able to benefit from the transaction, but it is a great option for an FHA homeowner looking to do any of the above.
Once you’ve outlined your goals and decided you’re ready to refinance, it’s time to fill out an application with your
lender. To fill out an application, it’s important to have these documents and information at the ready:
This refinance process can be completed quickly, but the application is just the first step. If you have any questions when filling out your application, reach out to your loan officer and they will help guide you through it. Once they finish reviewing your application, they’ll send it through the channels of their organization to get you approved.
Now that you’re approved and have chosen a mortgage program with your lender or loan officer – they’ll start asking you to provide the required documents. It’s important to keep open lines of communication with your lender to You’ll be required to submit the following documents to verify the information that you provided on your application:
Signed Disclosures
Once everything has been verified by the lender, they’ll provide you with a loan estimate, set up an appraisal, and get your loan cleared-to-close. During this time, you’ll be reviewing and signing a lot of documents to prepare for closing day. Make sure you review each one thoroughly – if you find any discrepancies – have your lender resolve them.
At the closing table – you’ll be signing documents that outline the responsibilities of homeownership, pledge your home as collateral for the loan, state the consequences if you fail to make payments, escrow (taxes and insurance) disclosures, and a right to cancel form. These documents all have formal names, but your loan officer will discuss them with you when the time comes.
With all the documents signed, your loan will be funded in three business days. The refinance process can be quick and easy with the help of Neighborhood Loans. We know the City of Chicago like the back of our hand and can help you with any of your questions or home buying needs. Reach out to us today or fill out an application online to get started.
Interest rates will always be changing based on the state of the economy, but the rate you receive will come down to your personal financial situation. Right now, if you want a 30-year-fixed mortgage, make a 20% down payment, and have an above-average credit score, you could expect a rate of roughly 3%. It could be higher or lower, but it will vary based on your financials and the lender you choose to work with.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nunc aliquam ultricies diam, eu faucibus augue consequat nec. Suspendisse potenti. Aenean aliquam venenatis efficitur. Maecenas nec mattis metus. Nulla facilisi. Aenean sed metus sed eros efficitur pretium. Curabitur eget diam semper, consequat mauris at, malesuada eros. Sed condimentum, felis nec tempor finibus, justo dui maximus lacus, sed egestas lectus ex condimentum lorem. Quisque ac massa malesuada, pharetra risus a, sagittis dui.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nunc aliquam ultricies diam, eu faucibus augue consequat nec. Suspendisse potenti. Aenean aliquam venenatis efficitur. Maecenas nec mattis metus. Nulla facilisi. Aenean sed metus sed eros efficitur pretium. Curabitur eget diam semper, consequat mauris at, malesuada eros. Sed condimentum, felis nec tempor finibus, justo dui maximus lacus, sed egestas lectus ex condimentum lorem. Quisque ac massa malesuada, pharetra risus a, sagittis dui.
The Mortgage Process from start to finish will require patience and could have unexpected twists and turns along the way. Always ask questions if you are unsure or uncomfortable with anything that’s going on. It can be easy to lose track of your home buying goals along that way, keep them in the back of your mind with every decision you make. If you’re ready to start the mortgage process, or have any further questions, reach out to Neighborhood Loans.
