Refinancing a mortgage is the process of acquiring a new loan to pay off an existing lender.

 

Frequently Asked Questions:

Q:  Is there such a thing as a "No Cost" mortgage?

A:  Technically speaking, there are always costs involved with any mortgage transactions. However, your lender can pay these costs for you by charging a slightly higher interest rate on your loan. Typical closing costs include the appraisal, title search, title insurance, attorney closing fees, prepaid taxes, etc. Another alternative is to roll the closing costs into the new loan amount.  Deciding on the best option involves first estimating how long you will keep the loan and then weighing the difference in the upfront cost vs. the increased monthly payment over that estimated period of time.

 

Q:  How long do I have to wait to refinance after a purchase transaction?

A:  The rule-of-thumb is to wait at least 6 months, but there may be exceptions. It's important to check with your lender at the time of initial application to make sure you know how long you need to wait. Another thing to consider is the cost of refinancing. If you are thinking about refinancing, please call one of our loan officers at Uwharrie Bank Mortgage.

 

Q:  I heard that I should only refinance if I drop my interest rate by at least 1%, is that true?

A:  No, that is not true. Depending on your loan amount and the prevailing interest rates, it is often worth refinancing when you can drop your rate by 1/2%. Every mortgage is different and it only takes one call to Uwharrie Bank Mortgage to figure this out.

 

Q:  Why can't I just compare my current payment to the proposed payment and figure out my net benefit?

A:  You could just compare the two payments if you wanted to find out your cash flow savings, but the current and proposed loans may have two different amortizations. Let's say you have a 15 year mortgage currently and you are comparing to a 30 year mortgage. If everything is the same (interest rate, loan amount, etc.) except for the amortization your interest savings per month would be $0, but you are going to show a cash flow saving because of the longer amortization.

 

Q:  Do I have to refinance with my current mortgage company?

A:  No, you may choose Uwharrie Bank or any company you wish to refinance your mortgage since the new loan will replace the loan mortgage.

 

Q:  Is it easier to refinance with my current mortgage company?

A:  Probably not. The chances are that your loan at this point would have been sold to a mortgage servicer that is really not setup to handle your refinance. Uwharrie Bank will typically require the same documentation from you that any other bank or lender would also need. Make sure that you check to make sure you're getting the best deal. In the end, most customers find that Uwharrie Bank is able to offer better interest rates.

 

Q:  Will I automatically qualify?

A:  No, you will have to qualify for your new refinance. However, certain programs will allow for reduced documentation

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