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Mortgage refinancing refers to the process of getting a new loan for your home, in order to help reduce monthly payments or lower interest rates. When refinancing, the new mortgage will replace the old one, leaving you with a lower monthly payment. Since the mortgage interest rates hits historical low, this is a good time for many people to refinance. The article below will discuss about the process of refinancing and how it works.


When applying to refinance, you will be asked to provide the same information when you bought a house, which include:

  • Two most recent pay stubs
  • Two most recent W-2s
  • Two most recent bank statements
  • Two most recent tax return

Same with your first loan, your lenders will look at the ability to pay such as income, assets, debt and credit score.

Lock your interest rate

Lock your rate means that your lender is committed to providing that day’s interest rate options, even if the interest rate goes up later. Rate lock will protect you from future changes as mortgage rates fluctuate daily based on market performance. When you lock, you’re basically asking lenders to keep all the prices available to you on all of our products for that date. Rate locks period last from 15 – 60 days, depending on a several factors like location, loan type and lender.

“Close up of Approved Mortgage Refinance Application Form with pen, calculator”



After you submit your application, your lender begins the underwriting process to verify all financial information and make sure they have all the documents needed.

Closing On Your New Loan

Once underwriting is complete, your lender will send over the closing disclosures where you will find all the final numbers for you to review. At the end, you will go through the loan details and sign your loan documents. Your last step is that you will pay any unpaid premium charges on your loan. This process tends to occur faster than closing for a house purchase.


Author: Vy Yakushenko



Kielar, H. (2020, October 27). Refinancing A Mortgage: How It Works. Retrieved from


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