Refinancing is a Brand New Mortgage
Refinancing can do a lot for you. From lowering your mortgage and interest rate, to getting a shorter loan term, to absolving your spouse from the deed, to trading an adjustable rate mortgage (ARM) for a fixed rate, to protecting yourself in case of a job layoff, refinancing can be used as a serious strategy for long-term savings.
When you refinance your mortgage, you're actually replacing it with a brand new loan. In doing this, expect to go through a mortgage application process similar to what you experienced with your original mortgage.
Before you apply for a mortgage you want to organize you documentation. Organization will save you time and frustration when applying for your new mortgage. You should gather together your tax returns from the last two years, your bank account statements, mortgage payment receipts and the payoff balance of your current mortgage. The more you can document when it comes to your income and assets the easier it will be for you to qualify for a better interest rate.
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