Common Refinance Questions

Listed below are some of the most frequently asked questions about a mortgage refinance. If your question isn't addressed in our refinance FAQ, please call and speak with one of our experienced lending officers who will be happy to answer any questions you have.

Should I refinance?

How much can I save if I refinance?

Get started online or call to talk to a licensed lending officer

What if I have a second mortgage on my home? Can I still refinance?

Typically, any second mortgages are paid off through the refinance. We will consolidate both loans into one new first mortgage and you will only have one payment each month. If you'd prefer to keep your second mortgage intact, we may be able to ask your second mortgage lender to remain in second position and allow us to refinance the first loan. This process is called subordination and there is typically a fee charged by the second mortgage lender.

Am I allowed to refinance if my property value is less than what I owe?

There are options that may allow you to refinance your loan even if the value of your home is less than what you owe. Call and speak with one of our licensed lending officers to see if you qualify for one of our programs.

What are the costs associated with refinancing?

Fees associated with refinancing vary from lender to lender but there are standard fees that are typical across the board. These fees include 3rd party fees such as credit report, title, escrow, notary, and recording fees. Other fees include the appraisal fee and lender fees such as processing and underwriting. If you are paying points to lower the rate, the cost of each point that you pay equals 1% of your new loan amount. Aside from the closing fees, there will be prorated pre-paid costs for items such as property taxes, interest, and homeowners insurance (if applicable). If you have enough equity in your home, you can add all fees and pre-paid items into your new loan.

What type of documentation do I need for refinance?

Standard documentation collected for a refinance transaction includes information regarding your income such as pay stubs covering the most recent 30 days and W-2s for the last two years, asset information such as bank or mutual fund/stock statements covering the last 60 days and current loan information such as your most recent mortgage statement and homeowners insurance declarations page.

Can I refinance with bad credit?

Depending on the reasons why your credit is imperfect, there are great loan options available including our government programs. Call and speak with one of our licensed lending officers to determine whether or not you qualify for one of our programs.

Is it true that you should only consider refinancing if you can lower your rate at least .5%?

There is no rule-of-thumb when it comes to refinancing because there are different reasons to refinance. If you are currently in an adjustable rate looking to get into a long-term fixed loan, your rate and payment may actually increase, but you will be in a better long-term situation knowing your rate and payment will not change. If you are looking to consolidate debt, your loan amount and mortgage payments may go up but your overall monthly outflow will decrease because you will have eliminated some or all of your credit card bills and other monthly obligations. There are also no-cost and low-cost refinance options that can lower your rate and payment with no or minimal investment. It is a good idea to go over your specific situation with a mortgage expert to determine whether refinancing makes sense or not.

How long is the refinance process?

Most refinance transactions could take up to 45 to 60 days based on the complexity of the loan. loanDepot has built a smooth and seamless process, enhanced by our proprietary paperless technology that enables us to close loans faster than the average industry turn-times. As long as you do your part in delivering the documentation that we need in a timely manner.

What happens at the loan closing?

Depending on the state where your property is located, you can either sign in your home or at a designated settlement location such as an escrow office or attorney's office. In the presence of the signing authority, you will review and sign all your loan documents and then present a certified or cashier's check to pay the closing fees and other applicable closing funds unless you decided to finance the closing funds into your new loan. Once the loan documents are signed and delivered back to us, your loan will close in 3 to 5 days. If you are pulling cash out of the equity in your home, you will receive your funds 1 to 3 days after your loan closes. For more details, please visit our Refinance process page.